UBS raised $225 million from private clients for KKR’s Global Impact fund, the latest example of major financial institutions responding to demand for more social impact investing opportunities.
The UBS fundraising is part of its five-year plan to commit $5 billion supporting the United Nations Sustainable Development Goals. The KKR fund invests in businesses that contribute measurable progress toward one or more of the U.N. goals without sacrificing financial performance. Launched in 2018, the fund topped its $1 billion fundraising goal and is still raising money, Bloomberg reported last month, citing a person with knowledge of the matter.
“Tackling global sustainability challenges is an increasingly important investment opportunity for us and for our clients,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said in a statement.
UBS made headlines two years ago at the World Economic Forum in Davos when it announced the commitment to direct $5 billion into social impact investments to “mainstream the asset class.” The Swiss bank, which has been fined billions in tax evasion, currency manipulation and other charges, hopes to encourage policymakers and private investors to build solutions that would make the world a better place.
- The 2017 effort led to $1.11 trillion in sustainable investment assets under management at the beginning of this year, which is equal to about 36% of UBS’s total invested assets.
- Last month UBS said that its UBS ETF (LU) MSCI World Socially Responsible UCITS ETF fund became the first fund in Europe focused on ESG investing to exceed €1 billion ($1.1 billion) in assets.
- The KKR fund has already made at least two investments. It has deployed up to $32.4 million in Singapore-based Barghest Building Performance, which focuses on increasing energy efficiency. The Impact fund, along with a second KKR fund, contributed to an investment of about $510 million in Mumbai-based environment manager Ramsky Enviro Engineers, according to Private Equity International.
- TPG’s Rise Fund, which describes itself as the “world’s largest global fund committed to achieving measurable, positive social and environmental outcomes,” attracted $2 billion for social impact investments, leading TPG to start raising funds for a second social impact vehicle called the Rise Fund II.
Karma Take: UBS continues to lead in promoting socially responsible investing as more private clients and fund managers see promise in these types of investments and look to include them in their portfolios.