NETHERLANDS - IMQubator, an innovation project backed by asset manager APG, has selected its first investment target with an allocation of €25m, and bought into a start-up fund combining an absolute return strategy with a new take on sustainability.
IMQubator has been created by the asset management arm of ABP, the Dutch civil servants pension scheme, to support experienced investment managers who want to start up their own businesses with seed capital, though IMQubator will only give the financial backing on the condition that they operate from the Netherlands.
APG has initially committed €250m to the institutional asset pool, according to Jeroen Tielman, chief executive officer at the project, as he explains the role of IMQubator.
"Institutional investors usually demand a track record of three- to five-years, even if key managers have strong experience with a recognized institutional investment firm", he said.
Tielman claimed the Branta Solutions Fund - selected through the IMQubator initiative - distinguishes itself through its vision on sustainability.
"Some fund managers invest in producers of solar panels that use scarce or poisonous commodities", he said. "But Branta will select only those companies that go one step further."
To this end, the fund has several ecologists in its team which, according to Tielman, "unites a unique top-down approach of sustainable investment strategies with a strong accent on risk management".
IMQubator has committed itself to the new fund for at least three years as "this allows the fund to build up a track record and attract other investors," said Tielman, who added: "We hope our commitment will accelerate this process."
The innovation fund not only provides seed capital but will also offer support on fiscal, legal, risk and administrative issues.
Tielman expects two other Dutch pension funds to add capital to the asset pool before the end of this year.
He admits earlier discussions have slowed because of the difficult investment climate, but believes the timing could work for IMQubator as well.
"Pension funds will look for other sources of investment return. This is the way to invest in the winners of tomorrow," continued Tielman, who noted there are potential benefits in the exchange of knowledge.
" The selection of truly innovative start-ups demands other evaluation techniques beyond the analysis of historical figures. This process can be very instructive for participating pension funds," he added.
The chosen Branta Solutions Fund will be run in Amsterdam by Willem Appel, who previously worked for ING in London and Tokyo, and he will be assisted by Cor Timmermans, formerly associated with hedge fund Fursa.
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