M&G to commit £5bn to private markets impact investments

M&G is to allocate £5 billion ($6.82 billion; €5.66 billion) from its With-Profits Fund to sustainable private assets including credit, equity and real assets.

The £136 billion With-Profits Fund contains long-term savings of more than five million Prudential customers in the UK. The commitment will meet rising global demand for capital from responsible enterprises that are currently underserved.

To implement the mandate, M&G has created a 25-strong investment team, named Catalyst, with a presence in London, Singapore, New York and Mumbai. It will have the flexibility to invest in private credit, real and financial assets and private equity to match the stage and nature of opportunities as well as providing ongoing support as businesses grow.

Examples of the type of investments Catalyst will make include SME and consumer finance, asset and development financing and technology investments with a positive social or environmental purpose.

Catalyst will form part of the private and alternative assets business of M&G, which already manages more than £65 billion of private assets investments. It will have a broad focus on impact investing from ESG risk management through to investments with a positive impact on vulnerable groups.

It will utilise the Impact Management Project’s classification framework to assess opportunities across environmental, social and governance, sustainability and impact.

Jon Foley, chief executive of M&G, said: “More and more customers are asking us to make a positive difference to the world through sustainable investment, while also seeking good financial returns to underpin their retirement.

“Many of the most attractive opportunities to do this are in private assets – new and existing companies and platforms which are not listed on an exchange. As a cornerstone investor in such enterprises, M&G can have a much greater influence in supporting their growth and on sustainability than we can in public markets.”