Nuveen completes $150 million first close of Global Impact Strategy to tackle income inequality and climate change

Global pandemic underscores critical need for private equity investment as equality gap widens and issues of waste, energy efficiency and climate change become more pressing than ever due to COVID-19.

Nuveen, a leading global investment manager with over $1 trillion in assets under management, announced the initial close of its Global Impact Strategy. Open to institutional investors globally, it secured $150 million in commitments toward its targeted $400 million offering.

Nuveen’s Global Impact strategy seeks to drive positive change in two critical sustainable development challenges – inclusive growth and resource efficiency. The strategy will target a 40-60% allocation to each theme.

“The current global pandemic heightens the need for investment in mitigating accelerated climate change, pollution and waste, and in creating a more inclusive economy addressing inequality. Low-income individuals have been hit the hardest by Covid-19, further widening the equality gap as the lack of access to quality and affordable services like education, health and financial products is more starkly visible than ever,” said Rekha Unnithan, CFA, co-head of private markets impact investing at Nuveen.

“We are seeing attractive investment opportunities at a time of tremendous dislocation in the economy, allowing us to collaborate with businesses focused on creating scalable and commercially viable products that are focused on solutions for people and planet,” said David Haddad, co-head of private markets impact investing at Nuveen.

Six of the United Nations Sustainable Development Goals (SDGs) set out as part of the Paris Agreement will be supported by the Global Impact Strategy: SDG1 (No poverty); SDG 2 (Zero hunger); SDG 3 (Good health and wellbeing); SDG 10 (Reduced inequalities); SDG 12 (Responsible consumption and reduction) and SDG 13 (Climate action).

A combined focus on both investment performance and advancement on issues relating to the SDGs by the Global Impact strategy was an important motivation for investors, including the Danish pension fund Velliv which committed $50 million in capital.

Anders Stensbøl Christiansen, CIO at Velliv, comments: “Nuveen has been an investment partner of ours for several years and we are delighted to further strengthen our relationship. They are a pioneer in Impact Investing and its experienced team has a proven track record. Now more than ever, there is a compelling case for Impact Investing, and we believe this strategy provides us with an appealing market opportunity to achieve competitive returns, whilst ensuring we are also achieving measurable Impact goals.”

Millions of low-income families currently lack the economic access to grow their income. A lack of financial inclusion and access to education and healthcare risk holding back this group with 1.7 billion adults currently have no banking of any kind¹; 200 million small businesses globally lack access to working capital to grow; 250 million children have no access to education and 50% of the population lack access to healthcare of any kind². To drive positive change against this backdrop, the Global Impact Strategy will invest in inclusive growth to support the low-income consumer, with a primary focus on emerging markets.

At the same time, there is a requirement to build more sustainable and resilient communities globally. By 2050, it is predicted we will need the equivalent of three planets to sustain current lifestyles³. To address this challenge the strategy will target investments enabling disruptive businesses that create efficiency and reduce waste, with a primary focus on developed markets.

The Global Impact strategy team at Nuveen will pursue direct private equity investments across both themes. The strategy targets strong risk adjusted Private Equity returns and target growth stage companies in developed and emerging markets that are at an inflection point where Nuveen can help them scale.

“We are committed to this discipline as a growing part of our portfolio construction due to both its potential for positive financial results as well as its positive influence on society’s most pressing problems,” said Nick Liolis, chief investment officer of the $270 billion General Account of Nuveen’s parent company, TIAA, which also made a commitment to the Global Impact strategy first closing.

Nuveen manages over $5.8 billion in public and private markets impact investing strategies and is a pioneer in global impact investing with its first investment in this discipline dating back to the 1980s. Since then it has invested over $400 million in direct and indirect private equity capital across over 200 portfolio companies in alignment with the United Nations Sustainable Development Goals.