As the fund manager of a fund that was launched recently, these are rather schizophrenic times. Only one week before the intelligent lock-down in the Netherlands we had our first Closing (or First Opening as we prefer to refer to it to indicate that this is only the beginning of the partnership). After a long period of conceptualization, preparation and negotiation we managed to be very efficient in our fundraising and raised €21 mln of private investors within 6 months.
What a timing to start a fund that has the mission to invest in Regeneration of human and natural capital, in a unexpected situation where the Corona virus has caused tremendous suffering to people and has brought society to a grinding halt and delivered an unparalleled blow to the global economy.
Moreover we feel blessed to have the opportunity to invest our capital in a time when our capital can be very additional (with risk capital drying up due to economic downturn) and transformative. We count our blessings that -unlike most fund managers- we do not have to worry about the impact of the Corona crisis on our existing portfolio as we will invest in the first fund TPG Rise II before the summer.
As any prudent fund manager would do, we revisited out strategy in light of the Corona crisis to see whether we needed to make adjustments based on these developments. The outcome of that process was reassuring: Besides some minor organizational, tactical and logistical tweaks, our investment strategy remains unchanged. In fact, we found that the Corona pandemic fully reinforces our Theory of Change. Our fund has been from the start about rebalancing the economic interests with the needs of our natural and social environment. Research has clearly shown that zoonotic viruses such as the Corona virus are able to jump from animals to humans due to the distortion of the ecological balance by mankind. This once again illustrates that our economy should not be viewed as a separate ecosystem, but is interconnected (or “wired” if you will) to our social and natural environment. We are hopeful that this pandemic will help to make people more aware of the interdependence between people and nature.
As far as we are concerned, there couldn’t be a better time to invest in Regeneration of Natural and Human capital. We believe -and here we base ourselves on the research we performed- that this is an excellent moment to deploy our capital. On the impact side, we can support great funds and companies working to solve a social or environmental problem in these difficult times. And on the financial side, previous crises such as the Dotcom bubble and the Global Financial Crisis show us that such countercyclical investment moments can be very good times to generate a healthy return in Private Equity. And that is what our fund is all about: Generating measurable impact and fair returns at the same time.
As we continue on our journey over the next months, we’ll keep you up to date with an occasional blog. Should you have any questions or comments , feel free to shoot me an email at email@example.com.
~ Ronald Janse, Fund Manager
Please read more about our reflections, strategy and execution in our full document by following this link.