Returns With Purpose

We launched the Impact Fund with the ambition to prove that returns and purpose could be achieved alongside each other

We invest in companies that are tackling some of the biggest issues we face in society today, such as education and job inequalities across the UK and Northern Europe, access to healthcare and climate change.

The Impact Fund is built on Palatine’s long heritage in sustainable investing. After many years of being one of the leading houses in ESG, we decided to raise an impact fund to actively target companies that are creating social or environmental change. The Impact Fund supports management teams not only in their growth ambitions, but also in their impact strategies as well. We invest between £5m and £30m.

Facing challenges, together

We support companies across the four themes below, which we believe cover some of the biggest challenges we face as a society. These themes are aligned to the UN Sustainable Development Goals (SDGs).

As the first UK mid-market private equity house to raise a dedicated returns-focused Impact Fund, we are at the forefront of this new and exciting area for private equity investment. To progress investment in impact strategies, we are active in promoting and increasing the understanding of impact investing by sitting on the British Private Equity & Venture Capital Association (BVCA) Impact Investing Committee, and sharing our experience at industry conferences and on our social channels. We are also a signatory to the Operating Principles for Impact Management. You can download our disclosure statement which describes our impact strategy and how it is aligned with the operating principles. You can also download our verification statement which highlights the alignment of our impact management system with the operating principles. Our framework ensures that impact creation and management is integrated into all stages of our investment lifecycle to ensure that our impact is scaled and sustainable.

Value Enhancement

The value enhancement strategy is bespoke to each business we back, but most will revolve around these three key areas. When building an impact strategy, one of the key areas is setting key performance indicators (KPIs) to demonstrate that the companies are having the desired impact and outcomes.

Each investment goes through a sequence of assessments, involving consultation with management, to understand the impact rationale and ambition of the management team. This involves defining what the company does and for who, as well as how that creates change to meet the need identified in the impact rationale.

Once the company purpose is established, we define KPIs that support the growth and development of this purpose and report on these KPIs both quarterly and in an annual report. Having increased our knowledge of KPI settings since the first impact investment in 2017, we have started to set KPI targets, in conjunction with management, for new investments, based on three-year business plans. This target-setting supports our ambition to drive both the impact and returns of our portfolio companies.

Strategic mergers and acquisitions

Performance optimisation

Environmental, Social and Governance (ESG)

Beth is Head of our Impact Fund and pioneered our ESG framework

Beth’s years of dedication in helping businesses develop positive ESG outcomes alongside strong financial performance, led her to launch the Impact Fund in 2017. Beth believes that private equity can generate returns with purpose.

I love to help passionate management teams grow businesses that create social and environmental change alongside commercial success. I lead our Impact fund and am proud that Palatine was the first private equity house in its market to raise an impact fund.

Beth Houghton

Head of Impact Fund – Palatine