The fund, in which Allied Irish Banks is a cornerstone investor, supports small- and medium-sized businesses in Ireland as they transition to the green economy.
Foresight Group, an Irish private equity and sustainable infrastructure investment manager, announced the second close of its AIB Foresight SME Impact Fund with a €25m investment from the Ireland Strategic Investment Fund (ISIF) sovereign development fund.
Allied Irish Banks (AIB) and Foresight had initially launched the fund investing in SMEs contributing to Ireland’s decarbonisation in 2022. As a cornerstone investor, Ireland’s biggest bank contributed €30m to the fund, which had a fundraising goal of €75m.
“At a general level, Foresight’s private equity strategy aims to deliver attractive economic returns, alongside broader long‐term benefits that positively impacts society,” a Foresight spokesman told Impact Investor. “Foresight supports the companies it invests into to adopt sustainable best practices, create high-quality local jobs, and understand its impact to enable its local economy to thrive.”
When asked about the fund’s criteria for investing, Foresight said it is looking for established SMEs located in Ireland or Northern Ireland, with earnings before interest, taxes, depreciation, and amortisation of more than €500,000 “with flexibility to invest at pre-profit stage for high-potential low-carbon opportunities”.
Climate investment plans
“This commitment is an example of ISIF’s ability to deploy capital in a targeted and commercial manner to address specific economic challenges,” Paul Saunders, senior investment director at ISIF, said in a joint press release.
ISIF is making the investment as part of a five-year, €1bn climate investment programme. It has so far committed €600m in funding.
The €25m investment “demonstrates clear intent around the strength and scope of ISIF’s climate investment plans as the fund supports Irish companies in adopting sustainable practices to advance Ireland’s transition to net zero”, Saunders said.
Since its inception, the AIB Foresight SME Impact Fund has invested €5.3m in SMEs across Ireland. It recently invested €1.2m into Hospital Services Limited, a specialist distributor in the healthcare market and has also invested in a building materials distribution company. The fund will typically stay invested for a period of three to five years.
“ISIF aligns with the fund’s strategy of backing strong businesses, regardless of sector, that are both growth-oriented and committed to reducing their carbon emissions – creating both long-term value and a positive impact,” said Barclay Clibborn, principal of the AIB Foresight SME Impact Fund.
The extra investment, combined with AIB’s cornerstone investment “will enable more SMEs across Ireland to be supported”, Gibbon said.
James Livingston, co-head of Foresight Private Equity and Partner, called the agreement “an important milestone” for the SME impact fund and “a vote of confidence in Foresight’s capabilities as we use our SME private equity experience to support growth companies across Ireland”.
Foresight Group, which was founded in 1984, has assets under management of £12.4bn. It operates in eight countries across Europe, Australia and the US, and manages over 400 infrastructure assets with a focus on solar and onshore wind assets, bioenergy and waste, as well as renewable energy enabling projects, energy efficiency management solutions, social and core infrastructure projects and sustainable forestry assets.
Foresight’s private equity team looks after eleven regionally focused investment funds across the UK, as well as the AIB Foresight SME impact fund.