M&G invests five billion pounds in sustainable investments
M&G, through its with-profits investment vehicle, currently worth $186.8 billion (£136 billion), will invest up to $6.86 billion (£5 billion) in private companies working to make the world a more sustainable place. The Catalyst team will seek global opportunities to invest in unlisted companies that would otherwise struggle to access growth and development capital.
To implement the new mandate, M&G has created a new global investment team called Catalyst, with offices in London, Singapore, New York, and Mumbai. The 25-strong team has the flexibility to invest in private credit, real estate, financial assets, and private equity, allowing it to tailor capital deployment according to investment opportunity and provide ongoing support as it develops.
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Positive social or ecological purpose in focus
Investment vehicles in the pipeline include SME finance and consumer finance (e.g., microfinance and trade receivables), asset and development finance (e.g., for affordable housing and energy from waste facilities), and investments in technologies with a positive social or environmental purpose.
John Foley, Chief Executive of M&G, said: “More and more clients are asking us to make a positive impact on the world through sustainable investing, while seeking good returns to secure their retirement.”
Private assets are strongly suited to the form of investments
“For this purpose, private assets are among the most attractive investment options – new and existing companies and platforms that are not publicly traded. As an anchor investor in such companies, M&G can have a much greater impact on their growth and sustainability than we can in public markets,” Foley notes.
Catalyst aims to invest in unlisted companies
Catalyst will be located within M&G’s Private & Alternative Assets division. With more than two decades of experience in private assets, M&G already manages more than $90 billion (£65.5 billion) in private credit, private equity and real estate for Prudential policyholders and external clients.
Drawing on this expertise and track record in private assets, the Catalyst team will seek global opportunities to invest in unlisted companies that would otherwise struggle to access growth and development capital.
Catalyst will have a broad, flexible impact focus
This ranges from ESG risk management to positive impact for vulnerable groups. The team will use the Impact Management Project’s (IMP) investment classification framework for sustainable investing to evaluate potential opportunities in three categories: 1. ESG Compatible – companies or assets that avoid harm; 2. Sustainable – companies that benefit stakeholders by delivering positive outcomes for people and the planet; and 3. Impact – companies that contribute to solving societal and environmental problems.
Positive screening via the M&G ESG Scorecard
Screening to ensure companies act in accordance with the principle of avoiding harm is based on criteria already established for all of M&G’s ESG funds, which exclude lines such as gambling, tobacco and controversial weapons. Positive screening is done via M&G’s proprietary ESG scorecard, which builds on international SASB standards and the “III” framework for impact investing.
(Featured image by Akil Mazumder via Pexels)
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