NZ officially joined the global ‘impact investing’ trend last week with the launch of the country’s first home-grown fund looking to back businesses “delivering tangible societal and environmental outcomes”.
And, as reported here last month, the Ākina Foundation is also targeting “market-rate financial returns” for the up to $15 million it raise for the wholesale Impact Enterprise Fund (IEF).
The IEF is targeting a “minimum internal [annual] rate of return” of 10 per cent while the parties backing the venture “are incentivised by the carried interest fees to achieved returns in excess of 15% p.a”, the fund’s just-published factsheet says.
According to the fund factsheet, the IEF will “provide funding across a range of investment stages, from seed and start-up to replacement capital, but focus primarily on expansion opportunities”.
“Investments will be equity and/or debt in scalable businesses that deliver tangible societal and/or environmental returns from their operations (Impact Businesses), alongside attractive financial return prospects,” the factsheet says.
Jointly-owned by the government-supported Ākina Foundation and licensed managed investment scheme operator, New Ground Capital, the IEF is also advised by newly-formed entity Impact Ventures.
Collectively, the three groups “and their associated parties, have committed to invest at least 5% of the minimum committed capital on the same terms as other investors”, according to the offer document.
Corporatised last May, Impact Ventures is wholly-owned by former FNZC investment banker, Chris Simcock. Prior to formally launching Impact Ventures this April, Simcock also served as adviser to the $100 million philanthropic Next Foundation for about 18 months, ending this March.
Simcock’s social media posting says Impact Ventures is “also providing corporate finance consulting services to NZ businesses in the areas of; mergers and acquisitions, capital structure reviews, valuation analysis and capital raisings”.
The IEF has a triple-tiered structure with independent chair, David Woods, heading a board comprising Ākina Foundation’s Gavin Fernandez and Louise Aitken, as well as Roy Thompson and Joy Marslin from New Ground Capital.
Meanwhile, the IEF investment committee – which must “unanimously” approve all of the fund’s placements – features current Rangatira Investments director, Sophie Haslem, former Shareholders Association chief, Bruce Sheppard, and another ex FNZC investment banker, Martin Stearne.
Dave Allison, Jonathan Holden, along with Simcock will run the IEF operations, the factsheet says.
In its report on the NZ market last month, the Responsible Investment Association of Australasia (RIAA) notes “very little reported activity within the category of impact investment and community finance [in NZ].
The RIAA picked up ”only a single investment identified in 2016” under the impact label in NZ, amounting to just $100,000.