Financing for social impact and climate businesses gets a billion dollar boost with new KKR fund
KKR, the multi-billion dollar, multi-strategy investment firm, has closed on over $1.3 billion for companies focused on social and environmental challenges.
KKR Global Impact says its fund will focus on identifying and investing in companies worldwide where preformance and social impact are intrinsically aligned. Specifically, the fund will invest in companies in the lower middle market that contribute toward progress along the United Nations Sustainable Development Goals.
“The UN SDGS were developed to mobilize citizens, policymakers, technologists and investors to address global challenges. As investors, we have a significant role to play in building businesses that contribute to SDG solutions while also generating financial returns for our fund investors by doing so,” said Robert Antablin and Ken Mehlman, KKR Partners and Co-Heads of KKR Global Impact, in a statement.
It’s a nice chunk of change that could potentially fund companies in the re-emerging climate and sustainability space, but it’s dwarfed by the $13.9 billion that KKR raised in 2017 for its Americas fund, or the $7 billion that the firm has to invest in infrastructure from its latest investment vehicle.
Mehlman’s role in promoting environmental and sustainable development stewardship belies his role as a senior administration official during George W. Bush’s tenure in the White House. He was appointed director of the Bush Administration’s Office of Political Affairs in 2000 and served in several administrative capacities both for the Republican Party within and outside of the White House.
Environmentalists have a pretty bleak assessment of the Bush years in office.
“[President Bush] has undone decades if not a century of progress on the environment,” Josh Dorner, a spokesman for the Sierra Club, one of America’s largest environmental groups, said to the Guardian about the Bush administration’s environmental record back in a 2008 interview.
“The Bush administration has introduced this pervasive rot into the federal government which has undermined the rule of law, undermined science, undermined basic competence and rendered government agencies unable to do their most basic function even if they wanted to.”
Twenty years later, Mehlman is working in the private sector on financing companies involved in mitigating and adapting the world to the climate crisis that inactivity from the administration he helped shepherd into office has exacerbated.
Other investment areas the KKR fund will focus on include responsible waste management, using technology to enhance safety, mobility and sustainability, creating more sustainable products and services and upgrading declining industry and infrastructure.
KKR launched its global impact business two years ago and its 12 person team has invested in Barghest Building Performance, Ramky Environ Engineers, KnowBe4, Burning Glass, and the construction of a wastewater treatment plant.
In addition to the external commitments KKR received, the firm said it will invest $130 million of capital in the fund through its own balance sheet.
“We are thrilled to see our investors’ shared enthusiasm for the tremendous opportunity we see ahead for KKR Global Impact and will build on this to help set the new standard across investing, value creation and measuring success in the space,” said Alisa Amarosa Wood, KKR Partner and Head of KKR’s Private Market Products Group.
KKR did not respond to a request for comment about Mehlman’s previous work in the Bush Administration.