05.09.2023 | News

Golding expands successful private equity impact strategy for Article 9 investors

The global fund of funds, Golding Impact 2021, has been upgraded to “dark green” and now meets the strict requirements of Article 9 Sustainable Finance Disclosure Regulation (SFDR). This represents Golding Capital Partners’ response to the increasing demand for investments with ambitious, measurable environmental and social sustainability objectives. In addition to investments in the EU, the fund’s global private equity impact strategy also enables investors to gain exposure to countries such as the US, Canada, UK, Switzerland as well as selected emerging markets, without having to forego the strict transparency rules introduced by the European SFDR. This expands the universe of impact funds available to institutional Article 9 investors significantly and also increases the level of diversification substantially. The impact fund will focus on companies with cutting-edge, transformative business models within climate technologies (85 per cent) and inclusive finance (15 per cent).


Impact fund opens up global Article 9 potential

According to research by Golding Capital Partners, only 30 per cent of all private equity impact funds worldwide are classified as qualifying for Article 9 of the Sustainable Finance Disclosure Regulation (SFDR), although many more have sustainable investment objectives and conform to strict sustainability criteria. “Impact funds based outside the European Union are often able to meet the requirements for classification under Article 9, but are typically not willing to incur the additional administrative costs of doing so. As a result, investors seeking to make Article 9 investments have until now been missing out on these opportunities. Our verification and classification process, carried out in close cooperation with our target fund managers, enables us to close this gap in the interest of our investors”, explains Dr Andreas Nilsson, Managing Director and Head of Impact Investing at Golding.

The fund’s investment strategy remains unchanged: It will focus on funds and their portfolio companies which on the one hand generate risk-adjusted market rate returns, and on the other hand contribute significantly to alleviating climate change, biodiversity loss and global inequality by virtue of their sustainable business models. The main geographic markets are Europe and North America, with a smaller allocation to emerging markets. The fund is structured as a Luxembourg SCS SICAV-RAIF and has a minimum commitment of €5 million.

Detailed verification process based on SFDR standards

The new classification is based on a process devised in cooperation with an advisory company, which mirrors the requirements of the SFDR for sustainable investments. Golding collects and reviews relevant data as defined by the SFDR to classify potential target funds based outside the EU and therefore not subject to the EU Disclosure Regulation, but still meet all the criteria of Article 9. “It is important to note that we are not reclassifying funds already covered by the SFDR according to our own criteria. What we are doing is reviewing target funds which are not formally classified under to the EU regulation with the aim to determine whether they conform to the SFDR criteria”, adds Dr Andreas Nilsson.

“Our impact strategy has a global scope and there is a large number of high-quality impact opportunities in North America, UK and some of the larger emerging markets that are not subject to the SFDR. The fact that we are now able to make them investable under the umbrella of an Article 9 fund is a great step forward and a pioneering achievement by our impact team. This expands the impact universe for institutional Article 9 investors by a significant multiple and enables even greater diversification”, says Dr Matthias Reicherter, Managing Partner and CIO at Golding.