OP Financial Group and Finnfund announced today that OP Finnfund Global Impact Fund I has raised EUR 76, marking the successful closing of the first impact fund in Finland to invest in emerging markets.
The fund’s success in raising capital is another indication of the strong and growing demand for sustainability-themed investments, as investors increasingly emphasize responsibility in their portolios. Recently, OP Financial reported that its ESG-themed funds have experienced substantial unitholder growth in recent years, and with demand intensifying further since the onset of the COVID-19 crisis.
The new fund is aiming to generate substantial positive impact in a broad range of sustainability focus areas, including climate change, food security, gender equality, and the availability of financing, through investments targeting three sectors in developing markets – renewable energy, financial institutions, and sustainable agriculture.
With a net profit goal of 8-12% (IRR), OP Finnfund Global Impact Fund I will only invest in projects with a risk level corresponding to that return level, that can also have a significant sustainability impact. The fund anticipates making its first investments over the summer, with initial investments under consideration targeting innovative food production in East Africa and fund female-owned businesses in Asia.
Commenting on the closing, and the appeal to investors of sustainability investments, Tuomas Virtala, Head of Asset Management for Corporate and Institutional Customers, OP Corporate Bank, said:
“The successful first closing shows that investors are interested in promoting sustainability and emerging growth markets even during the COVID-19 pandemic. Even though investors are currently cautious and will carefully consider long-term investments, the impact fund attracted more interest than we could have anticipated.”
Virtala continued, “Impact investing is not charity but aimed at having a positive impact alongside competitive investment yields. This is the only long-term way to organise financing to resolve sustainability challenges. It is encouraging that some of the world’s largest asset managers have got involved in impact investing.”
Markus Pietikäinen, Chief Investment Officer of Finnfund, added:
“Finnfund is one of the fund’s anchor investors. The fund utilises our long-standing expertise in identifying suitable investments. Having followed the field, I strongly believe in the growth of impact investing as, in addition to profits, investors want to promote solutions to sustainability challenges.”
The target size of OP Finnfund Global Impact Fund I is EUR 100 million, and a second round of funding is anticipated to be organized in the autumn.