London-based investment house M&G has launched what it claims to be the first multi-sector debt fund from a mainstream asset manager that aims to achieve a positive social or environmental impact.
The £44.5 million (€51 million) M&G Impact Financing Fund will invest predominately in private and illiquid debt and aims to provide investors with regular income and a total return in excess of public bonds.
The diversified fund has so far participated in several private and illiquid debt deals, including lending to the developer behind the major regeneration of the Greenwich peninsula in London, supporting solar power in the US and providing finance to UK housing associations.
M&G says that the deals will directly help build houses, provide employment and reduce carbon dioxide emissions.
Big Society Capital, the Swedish Foundation for Strategic Environmental Research and M&G Prudential are seed investors in the fund.
M&G chief executive Anne Richards said: “Asset managers are playing an essential role in putting people’s savings to work in the economy to help create better futures for everyone.
“This fund is an opportunity for charities, pension funds and other like-minded investors to lend for impact by financing projects that benefit both the environment and society.”
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