KKR Manager Talks ESG Fund

on Mar 5, 2020
  • KKR is another name in the growing ESG and impact investing space.
  • But the private equity giant's first work in the field dates back 12 years.
  • The private equity has become an expert at simultaneously lowering carbon emissions and costs.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

Private equity giant KKR announced in mid-February the final closing of its KKR Global Impact Fund. The company will allocate $1.3 billion in companies whose “core business models provide commercial solutions to an environmental or social challenge.”

Are you looking for signals & alerts from pro-traders? Sign-up to Invezz Signals™ for FREE. Takes 2 mins.

On Thursday KKR’s Director of Sustainable Investing Elizabeth Seeger explained to Bloomberg how it expects to stand out in a fast-growing and already crowded environment.

Hard to Avoid Impact Investing

Money managers of all sorts are finding it hard to avoid offering some form of exposure to “impact investing,” she said on “Bloomberg Daybreak: Americas.” In KKR’s case, the company’s focus on promoting sustainability initiatives dates back more than a decade.

Twelve years ago, KKR started including environmental, social, and governance (ESG) issues as part of its private equity investment process, Seeger said. KKR also started offering advice to its portfolio companies on how they can improve their environmental and social performance while simultaneously improving business performance.

At the same time, KKR started seeking out investments in companies that are dedicated to solving challenges in their marketplace through its flagship private equity infrastructure funds. 

“Those two things really built a track record and a deep understanding of these topics,” she said.

Specific Examples

KKR built deep expertise in energy efficiency which helps companies lower their energy bills and improve their environmental footprint. The knowledge acquired over the years has been shared and implemented at more than 50 companies across the world.

The first recipient of an investment round out of KKR’s new fund was Barghest Building Performance. The Singapore-based company helps its large industrial customers reduce energy use in their heating and ventilation systems. 

BBP was a perfect fit for KKR as the two entities already shared a common vision and goal.

Another example of a global investment consists of a $510 million stake in India-based environmental services and solutions provider company called Ramky Enviro Engineers. According to a press release, the Indian company is active in supporting a reduction in pollution and improving critical sanitation infrastructure across the country.

One last example is KKR acquiring a majority stake in Burning Glass, a leading real-time labor market data source. Burning Glass oversees the world’s largest and most sophisticated database of labor market data and talent. 

Burning Glass is also dedicated to positioning its business to satisfy two of the United Nations’ sustainability goals, including “Quality Education,” and “Decent Work and Economic Growth.”

Alternative Investment