Impact Investing: First joint project successfully launched by OeEB and Bank Gutmann. The cooperation between OeEB and a private bank is a novelty that opens up new perspectives for large-scale investors. The Gutmann OeEB Impact Fund is intended to improve the living conditions of people in developing and emerging countries, while generating attractive returns. The fund is now starting with the first capital commitments, 100 million should be in one year.
Simultaneous pursuit of financial returns as well as pre-defined social and/or environmental goals is called impact investing. With the Gutmann OeEB Impact Fund, the private bank has now launched a product with its cooperation partner OeEB, the Development Bank of Austria, in which investments contribute to the achievement of the UN Sustainable Development Goals (SDGs). These include i.a. poverty reduction, gender equality, decent working conditions or responsible production. The joint impact approach makes these goals even more concrete and, above all, measurable.
Outcome with impact
"The financing gap to achieve the UN Sustainable Development Goals is estimated to be one trillion dollars a year (!)," said Hannes Manndorff, managing director of Private Equity at OeEB which has more than 10 years of experience in impact investing. "Capital that could be invested meaningfully and profitably at the same time, but cannot be raised by the public sector alone. Private investors are needed to bridge this gap."
Bank Gutmann has over 20 years of expertise in private equity and currently manages five funds of funds with over 50 investments and a volume of EUR 260 million. Nikolaus Görg, Head of Private Markets and Project Manager at Bank Gutmann: "As expected, the interest shown by our customers was high. The first closing of the Gutmann OeEB Impact Fund was completed 12 weeks after the start of the sales. However, as a 'first mover' in this constellation, I also see great development potential beyond that." Görg expects to at least double the investment volume within one year.
Investment approach: Do good
The overarching goal, in addition to the financial return, is the improvement of living conditions for people in developing and emerging countries. The Gutmann OeEB Impact Fund invests in around ten private equity funds, which in turn invest on three continents, and in 20 to 30 countries in around 100 companies. The division of responsibilities is clearly defined: experts from OeEB prepare proposals, the Investment Committee - consisting of independent impact experts and financial experts from Bank Gutmann - makes the final selection and approves of investments.
Focus: SMEs and financial inclusion
The focus is on small and medium-sized private sector companies - an area that is estimated to provide four out of five new jobs - as well as the financial inclusion of people. In the three-stage investment approach, any negative effects of the projects are eliminated or at least minimized after the cost-effectiveness check, and thereafter the positive effects are actively sought and measured on an ongoing basis. This is based on the "Development Effectiveness Rating" (DERa ©) developed by the German Development Finance Institution DEG. This includes decent jobs, local income, market and sector development, environmental stewardship and community benefits.
Several studies have shown that impact investing offers near-market returns. Nevertheless, this form of investment, as is generally the case with private equity, is reserved for experienced investors.
This is an advertising message. The Gutmann OeEB Impact Fund is authorized in Austria exclusively for distribution to professional investors and qualified private clients. This summary of the cooperation between OeEB and Bank Gutmann does not constitute investment advice, a recommendation to buy or sell or an offer or invitation to tender for the purchase or sale of private equity shares.
About Bank Gutmann
Founded in 1922, Privatbank Gutmann is a wealth management specialist and market leader in Austria. An 80 percent interest in the bank is held by the Kahane family, another 20 percent by executive and non-executive partners. Gutmann currently manages client assets worth EUR 23.8 billion (as of 30 September 2019). This volume has more than doubled since 2008. Gutmann clients include domestic and international entrepreneurs and entrepreneurial families, foundations and trusts, wealthy private clients and institutional investors. The long-established Viennese bank has won multiple awards as a leading private bank in Austria, in German-speaking countries and in CEE countries.