Source: Ian Tuttle
Goldman Sachs Asset Management is the manager of the fifth largest pool of impact capital in the world: the New York-led firm has raised over $9 billion since 2020.
On the climate side, Horizon Environment and Climate Solutions I, a private equity vehicle, closed on $1.64 billion in 2022. Its successor came to market last year. Horizon Inclusive Growth I was launched in 2023 to invest in three social impact sectors: education, healthcare and financial services.
New Private Markets caught up with Greg Shell, partner and head of the Inclusive Growth fund, to get his thoughts on the impact environment in 2025.
What is your perception of client appetite for impact in 2025? Are there particular areas/themes that are driving client activity?
Client interest in impact is notably intense where it exists, particularly in European markets where we observe a pronounced emphasis on sustainability initiatives. We find that where sustainability efforts are present, they are heavily driven by climate transition objectives. Meanwhile for the social sector, clients have exhibited a strong focus on impact measurement and management [which] is paramount for continued growth and effectiveness given skepticism from investors around quantification of social impact. Goldman Sachs Alternatives is actively implementing and refining processes to effectively track and communicate the impact of our investment strategies across both inclusive growth and climate transition.
How have you found raising capital for the Inclusive Growth fund? Does it interest a different profile of investor to Goldman’s climate-focused strategies?
We are observing several challenging market dynamics for private equity, with valuations generally declining and fundraising timelines extending. Against this backdrop of market uncertainty, LPs have grown increasingly risk averse, favoring seasoned GPs and consolidating their capital with a smaller number of proven managers. While this may limit opportunities for first-time funds, especially within the impact investment sector, we have observed strong demand for lower middle-market strategies capitalising on an evolving economic landscape which is expected to support the growth and success of SMEs. Goldman Sachs Alternatives seeks to leverage the depth and breadth of our network and value creation capabilities with the goal of driving transformative outcomes for companies in this stage of growth, which we believe allows us to outperform within current market conditions and appeal to a diverse investor base.
What is next for Goldman’s impact platform? Are there any areas you view as untapped opportunities?
Our primary focus today is on raising additional capital for our impact strategies in market, deploying capital in alignment with those strategies, and actively managing our portfolios to seek to drive returns and provide an exceptional experience for LPs. We believe our approach to impact across the key themes of inclusive growth and climate transition allows us to effectuate change in sectors that face structural challenges in need of innovative solutions. We seek to meet our clients’ diverse needs in this way and look to provide impact-oriented LPs with a best in class experience.
Continue reading our Impact 50 coverage here.
Source: newprivatemarkets.com
