Case study introduces the Impact Assessment and Contribution Tool (IMPACT) that is used to evaluate impact fund managers
J.P. Morgan Private Bank and Tideline published a case study on the Global Impact Fund (“GIF” or “the Fund”), a pioneering impact investing fund-of-funds, and introduced the Fund’s new Impact Assessment and Contribution Tool (IMPACT) that is used to identify and evaluate impact fund managers. The Fund and the IMPACT framework were developed collaboratively by the J.P. Morgan Private Bank Sustainable Investing and Private Investment Due Diligence teams and Tideline, a leading impact investment consulting firm.
The Fund, which closed in March 2021 with more than $150 million in capital commitments, has made allocations to seven buy-out, growth- and venture-stage private equity strategies to date. J.P. Morgan Private Bank and Tideline are also committed to ambitious diversity objectives in the GIF and have achieved a 49% capital allocation to fund managers that are diverse-led or -owned.
“A thoughtful approach to impact investing requires a rigorous approach to impact management and measurement,” said Jessica Matthews, Managing Director and Global Head of Sustainable Investing, J.P. Morgan Private Bank. “The creation of IMPACT represents a big step forward both for J.P. Morgan Private Bank and our clients, as well as for the larger impact investing industry, in our shared efforts to accelerate the flow of capital to diverse fund managers and companies committed to impact.”
IMPACT is designed as a ratings approach to impact fund diligence and builds on other common impact investing tools and frameworks, such as the UN Sustainable Development Goals (SDGs), IRIS+, Impact Management Project (IMP), and the Operating Principles for Impact Management. IMPACT allows J.P. Morgan Private Bank to compare and contrast the impact characteristics of funds across disparate impact themes.
IMPACT includes four core pillars of analysis: Strategic Intent, Impact Integration, ESG+ and Contribution. Each impact fund manager in the investment pipeline is scored or assessed against these pillars to provide an additional input into manager selection. The case study includes two specific examples of IMPACT in action based on two managers in the GIF portfolio: Trill Impact, a European-based private equity buyout manager, and Elevar Equity, an emerging markets venture capital firm.
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“J.P. Morgan Private Bank was a natural partner for the co-creation of IMPACT as a tool for manager due diligence,” said Ben Thornley, Managing Partner at Tideline. “As the impact investing industry continues to grow and mature, institutional allocators like J.P. Morgan Private Bank need a way to differentiate between a variety of fund managers and commit capital only to those with a truly rigorous approach to impact investing and impact management.”
J.P. Morgan Private Bank launched the Global Impact Fund in 2020 with the goal of committing client capital across three investment themes that are aligned with the SDGs:
- Inclusive Growth: Advancing the shift toward equal economic opportunity through access to financial services, quality education and training, and promoting inclusive business practices by investing in human capital. Potential investment opportunities include education technology, financial inclusion and employment training.
- Climate Solutions: Advancing agricultural and energy efficiency, sustainable water use, climate resilience, and the renewable energy transition. Potential investment opportunities include renewable energy transformation, electric vehicles, agriculture technology and circular economy.
- Health and Wellness: Advancing access to quality, affordable healthcare and treatments, and food access and security. Potential investment opportunities include healthcare inclusion and nutritional consumer products.
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