Private equity giant KKR & Co Inc has achieved a significant milestone with the completion of its second global impact fund, dedicated to investments that promote sustainability and social equity.
The fund has garnered an impressive $2.8 billion in commitments, signaling growing investor interest in advancing causes aligned with a positive impact on society and the environment.
Ken Mehlman and Robert Antablin, the co-heads of KKR’s global impact fund, shared insights in an interview with Reuters. They attributed the fund’s remarkable success to the increasing opportunities for capital deployment in areas that drive sustainability and social equity. This surge in interest has resulted in commitments from investors that more than double the size of their first impact fund, which raised $1.3 billion in 2020.
“The resiliency of our portfolio and growth in our strategy reflect the tailwinds in our business,” stated Mehlman. These tailwinds encompass various factors, including the global shift towards cleaner energy sources, resource recycling within supply chains, and companies’ dedication to enhancing their workforces.
To qualify for inclusion within the impact fund’s investment portfolio, companies must contribute to one or more of the United Nations’ 17 sustainable development goals in a measurable and impactful manner. The impact fund is flexible in its investment approach, able to invest alongside KKR’s other private equity funds, though it primarily operates as the sole KKR fund participating in the majority of its investments.
KKR’s global impact team has exhibited substantial growth since its launch in 2018, expanding from four individuals to a team of over 20. During this period, the team has executed 18 impactful investments, supporting a diverse range of initiatives. Some notable investments include:
CoolIT Systems: A company that enables data centers to reduce energy consumption through innovative liquid cooling solutions.
CMC Packaging Automation: Focusing on reducing packaging material consumption through custom design solutions.
Graduation Alliance: A platform dedicated to helping high school dropouts earn their high school diplomas, improving their educational prospects.
Five Star: A lending platform that promotes economic opportunities by providing support to small businesses in southern and central India.
KKR’s first impact fund, launched earlier, has demonstrated its value by more than doubling the returns for its investors as of the end of June, according to the firm’s most recent quarterly earnings disclosure.
“We target middle-market private equity returns in line with our other businesses,” affirmed Antablin, emphasizing the commitment to delivering strong financial performance while driving positive societal and environmental change.