The fund will focus on companies across sectors aligned to the UN Sustainable Development Goals, with over 90% of revenues expected to be SDG-aligned.
Columbia Threadneedle has raised over €50m at the first close of Castle Mount Impact Partners, a private markets impact fund aimed at addressing environmental sustainability, health and wellbeing, as well as equality and inclusion.
The firm is targeting a final close of €200m for the fund, which was launched in 2021 under BMO Global Asset Management, prior to its acquisition by Columbia Threadneedle.
Speaking to Impact Investor about the fund’s launch and the path to its first close, Andrew Carnwath, lead director on the fund and head of impact at Columbia Threadneedle Private Equity, said: “We commenced pre-marketing for the fund in 2021. Since then, we have spent time developing the proposition, communicating it to potential investors and refining our impact methodology.”
He added that, given the challenging private equity fundraising environment, they were “delighted to have secured a first close at over €50m and expect fundraising to pick-up with further closes over the next few months to take us to our target fund size of €200m”.
The fund has attracted investment from a range of institutional, wholesale and high-net-worth investors from the UK and Canada.
Columbia Threadneedle said the fund is aiming to build a portfolio of 15 to 20 lower mid-market companies predominately in western economies across sectors aligned to the UN Sustainable Development Goals (SDGs), with over 90% of revenues expected to be SDG-aligned, while targeting a 20% net internal rate of return (IRR).
“We are greatly appreciative of our first close investors, which includes existing and new clients, for backing us in this exciting venture,” said Hamish Mair, head of private equity at Columbia Threadneedle. “We firmly believe investors can do good and do well.”
Speaking about the fund’s investment approach, Carnwath said in a statement: “Impactful companies offer some of the most attractive investment opportunities due to strong and non-cyclical demand for their products and services.
“The fund will provide access to these companies, investing alongside sector and regional mid-market specialists. We will work with our investment partners to help the companies measure and articulate their positive impact, accelerating growth in profitability and shareholder value,” Carnwath added.
According to Carnwath, the fund will invest in high-growth companies whose products and services are delivering human and planetary needs, not wants, and benefit from strong non-cyclical demand.
Furthermore, he said portfolio companies should also benefit from global megatrends such as the energy transition, resource scarcity, ageing populations, digitalisation and AI. “As such we believe that these provide the most attractive investment opportunities and offer exceptional risk adjusted returns,” said Carnwath.
The fund has made its first investment into Kee Safety, a fall protection and industrial safety firm whose products aim to reduce workplace injuries.
