Alecta, Sweden’s largest pension fund, has committed a $200 million anchor investment for an impact fund co-investing in emerging market loans, overshooting the fund’s target by $50 million.
Closing 25 percentage points above target at $250 million, the new fund is a collaboration of NN Investment Partners ($296 billion) and the investment arm of Dutch bank FMO ($10 billion). A second close due later this year is expected to net another $750 million, which NN credits to FMO Investment Management’s annual loan commitments of more than $2 billion.
The closed-end NN-FMO Emerging Markets Loan Fund invests in loans with an emphasis on environmental, social, and governance (ESG) investing in emerging markets. This includes renewable energy projects and agribusiness companies. However, the closed-end nature presents the opportunity for an investment within the fund to fall into the alternative fixed income, private, or emerging markets debt classes.
Magnus Billing, CEO of the $90 billion Alecta, called the anchor decision “a good example” of how the occupational pension plan, which covers the retirement benefits of therapists, doctors, and lawyers, can meet its sustainability goals. In a statement, he said the NN/FMO fund creates “measurable impact aligned with the 2030 Agenda for Sustainable Development Goals.”
The cooperative fund also received investments from the IMAS Foundation, the investing arm of the indirect owner of IKEA, the INGKA Foundation.