AFRICA – OP Finnfund Global Impact Fund I, a Finland based fund, has raised €76 million (US$86 million) in its first round of funding, attracting various institutional investors targeting significant sustainability impacts in addition to profits.
Finland’s Church Pension Fund, Security Trading Oy, Oy Julius Tallberg AB, the Finnish Industrial Union, the Finnish Municipal Foundation, the Finnish Red Cross, OP Life Assurance Company and Finnfund have participated in the first close.
It is the first Finnish impact fund to invest in emerging markets. The fund made its first close on June 17, 2020 and second round of funding will be organised in the autumn. The target size of OP Finnfund Global Impact Fund I is €100m (US$112m).
“The successful first closing shows that investors are interested in promoting sustainability and emerging growth markets even during the COVID-19 pandemic. Even though investors are currently cautious and will carefully consider long-term investments, the impact fund attracted more interest than we could have anticipated,” said Tuomas Virtala, Head of Asset Management for Corporate and Institutional Customers, OP Corporate Bank.
OP Finnfund Global Impact Fund I focuses on three sectors in developing countries: renewable energy, financial institutions, and sustainable agriculture. The fund’s net profit goal is 8–12% (IRR).
The fund will only invest in projects with an expected return that corresponds to the risk, and that can also have a significant impact on sustainability. Finnfund Global Impact Fund I will make its first investments over the summer.
The first investments under consideration would target innovative food production in East Africa and fund female-owned businesses in Asia. Finnfund is one of the fund’s anchor investors.
“Impact investing is not charity but aimed at having a positive impact alongside competitive investment yields. This is the only long-term way to organise financing to resolve sustainability challenges. It is encouraging that some of the world’s largest asset managers have got involved in impact investing,” Virtala added.
The fund monitors impact indicators shared by all investments, which are based on e.g. CO2 emissions, jobs, tax income and equality. In addition, sector-specific impact indicators are monitored in reporting.
“The fund utilises our long-standing expertise in identifying suitable investments. Having followed the field, I strongly believe in the growth of impact investing as, in addition to profits, investors want to promote solutions to sustainability challenges,” Markus Pietikäinen, CIO of Finnfund, said.
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