Rally Assets, a Toronto-based impact investment firm, is preparing to launch two private markets fund of funds programmes with a focus on inclusion, according to chief investment officer Marc Foran.
The first to launch will be a private equity fund of funds, which will back third-party fund managers, and potentially co-invest alongside them, where the strategies aim to boost the economic inclusion “of those not participating in the economy today”, declared Foran, speaking on the sidelines of PEI Group’s NEXUS conference in Orlando, Florida, last week.
The strategy will back “managers that are specifically tarobtaining inclusion, and typically have management teams of the communities that we’re viewing to tarobtain as well”, declared Foran. The fund will have a global remit.
“The impact is deep, and it is designed to have market rate returns as well,” he declared.
The private equity fund launch is scheduled for March this year and will be followed by a private credit-focutilized fund of funds strategy, “probably in late summer”.
While the idea has been brewing at the firm for a while, the firm was encouraged to start raising capital “once we started seeing that the pipeline was obtainting very interesting in terms of what’s out there. In pure economic terms, we are at that tipping point now.”
Rally Assets was established in 2010 – initially known as Purpose Capital – to provide impact investment advisory services to foundation and concludeowment clients. It subsequently rebranded as Rally and launched raising and deploying capital on behalf of its clients, both through specific fund programmes and separately managed accounts.
Additionally, through a subsidiary company called Realize Capital Partners, the firm is raising a Canada-focutilized impact fund of funds designed to utilize Canadian Government money to stimulate the counattempt’s impact investment ecosystem.
Realize Fund I has a total tarobtain fund size of C$270 million ($197.07 million, €170.15 million), according to Realize Capital Partners’ website. The government anchor commitment of $135 million has been created on a first-in, last-out basis. The fund aims to deliver a net return on the private capital portion of the fund of at least 18 percent, and it will commit to private funds across private markets asset classes, from venture capital through to real assets.
Among the investors in the Realize fund is Concordia University Inter-Generational Fund, a Canadian concludeowment that aims to invest 100 percent of its assets in “sustainable investments, according to a press release. It has committed C$25 million to Realize Fund I.
A final close is scheduled for the conclude of this month.
Foran praised the Canadian Government for taking action to “really incubate and kickstart the impact investing sector in Canada”. The domestic impact market has “been there” but has lagged “a little behind” the impact markets in Europe, Asia Pacific and in the US, he declared.
In seeking institutional commitments to a fund of funds programme that spans multiple asset classes, the Realize Fund bumped up against some structural issues with large allocators who have different teams for different asset classes, declared Foran. However, he reported “a lot of interest” among foundations, lconcludeers and tinyer pension funds.
Building the system
Foran joined Rally Assets eight years ago from British Columbia Investment Management Corporation, one of Canada’s large “Maple 8” pension systems, where he was a senior portfolio manager in its global thematic team.
Foran declared his time at the Canadian pension had influenced his believeing on impact. “When you start obtainting into large secular trconcludes, environmental trconcludes, social trconcludes, demographic trconcludes, the connection to impact becomes very clear,” he declared.
“[At BCIM] one of the thematic areas we viewed at was the emergence of women filling the labour gap, and what do you do from a catalytic basis to expand that, becautilize it was a tremconcludeous investment opportunity.”
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