Impact investing —participation in projects and companies whose main goal is to provide solutions to social or environmental issues— has attracted the attention of private equity giant Blackstone, which has launched a specific platform to analyze and channel this type of operation. This initiative confirms the promising future expected for this investment modality.
Until now, impact investing had been the exclusive domain of relatively small funds specialized in sustainability and social development. However, with the entry of major players like Blackstone, it is anticipated that leading venture capital firms will strongly incorporate this area into their portfolios, driven both by the need to allocate large volumes of capital and by the growing demand for ESG (environmental, social, and governance) criteria.
On April 6, Blackstone announced the creation of this platform focused exclusively on impact investing, aiming to “meet the growing demand” it has detected in the market, according to Jon Gray, the firm’s president and chief operating officer.
Blackstone’s new division will focus its efforts on four key areas: health and wellness, access to financial services, sustainable communities, and green technologies. To lead this project, the firm has brought in Tanya Barnes, formerly of Goldman Sachs, who stated that they seek to leverage Blackstone’s experience and scale to increase the role of venture capital in finding solutions to the planet’s most urgent social and environmental challenges.
A Growing Phenomenon
Blackstone is not the only major firm betting on impact investing. The U.S.-based TPG Capital is in the process of raising a second impact fund targeting nearly $3 billion. Meanwhile, the Swiss firm Partners Group raised $1 billion last year for sustainable investments.
Blackstone’s move also comes amid activity in Europe, where Jan Stahlberg, co-founder of the Scandinavian fund EQT, has announced his departure to create his own fund dedicated to impact investing, with a fundraising target between €300 million and €500 million.
Situation in Spain
In Spain, the adoption of this trend by generalist funds has been more limited, but Gala Capital stands out. Led by Carlos Tejera, Gala Capital closed its Gala Capital Premier III fund in 2018 with €200 million, aimed at supporting mid-sized Spanish companies pursuing positive social impact through job creation, integration policies, innovation, and environmental respect.
Furthermore, the sector’s growing relevance is reflected in the intention of the public venture capital fund of funds Fond-ICO Global to create a specific line for social impact investment in future calls—a project that has taken shape over recent months and has industry support to consolidate soon.
