ESG Deal of the Year
Bridges (Impact Food Group - IFG)
Bridges invests in the transition to a more sustainable and inclusive economy – one where more people can thrive and fulfil their potential, while reducing our impact on the planet. Focusing on four impact themes, we systematically target investable models where there is a strong positive correlation (a "lockstep") between commercial and impact performance: so as our investees scale, they also deliver more social and/or environmental impact.
Through our investment research within our 'Healthier Lives' theme (which is closely aligned to SDG 3, Good Health & Wellbeing), we identified that the school catering sector offered an outstanding opportunity to drive better health and education outcomes for children, alongside strong commercial performance. With nearly one in three 11-year-olds overweight or obese, there is a clear need – and a strong demand from schools – for catering services that help children to develop better eating habits.
Bridges initially invested into two separate high-quality operators, Innovate and Cucina, and then brought the two businesses together to form Impact Food Group (IFG). By the time Bridges exited IFG in 2022, the business was serving healthier food to over 270,000 students across more than 300 primary and secondary schools throughout England – up from 70 when we invested.
ECI (Tusker)
In the last 12 months ECI exited Tusker, a fantastic example of being able to deliver environmental impact, fantastic growth and an excellent return. Tusker is a market-leading UK-based vehicle management and leasing company. ECI invested in 2015, and during the course of its investment the business pivoted towards electric vehicles, with electric as a percentage of total fleet going from less than 10% to over 70%. The inclusive motoring package it offered through a salary sacrifice scheme was one of the most affordable ways that buyers could access an electric vehicle, supporting the transition to Net Zero. This repositioning of the business as ‘the affordable way to drive electric’ led to significant growth over the hold period.
Lloyds Banking Group acquired Tusker in 2023 stating that the acquisition supported the Group’s ambitions to achieve the UK government’s net zero emissions targets by 2050 or sooner through the promotion of the use of Electric Vehicles (EV) and Ultra-Low Emission Vehicles (ULEV). Alongside the green nature of the business, Tusker also made significant progress in its own environmental performance during ECI’s hold period, becoming carbon neutral in 2021, and overall becoming a net positive contributor to the environment. The exit for ECI led to a return of 6.2x gross MOIC.
Foresight Group (Mowgli)
Foresight Group had a strong year with key acquisitions and natural growth resulting in our AUMincreasing by 38% to £12.0 billion as at 30 June 2023 (2022: £8.8 billion), well in excess of our targetof 20-25% over a rolling three-year period.
Key acquisitions over the period were Infrastructure Capital Group, which has now become ForesightAustralia, and the Private Equity Downing portfolio. As well as achieving our targets, we were alsoable to grow and diversify our geographic footprint with a presence now across eight countries.
Our outstanding Group performance, achieved against a challenging economic backdrop, reflects the strength of our diversified and resilient business model. Our corporate business has continued to progress its approach to sustainability reporting and commitments, and during the year we developed a new sustainability data management platform, “PACT”, supporting both the corporate business and our private equity portfolio of SMEs.
Our Private Equity division launched its first impact fund supporting Irish SMEs. New investment streams this year demonstrate our commitment to transition the wider economy and not the energy industry alone. Whilst we’ve continued to invest in renewable energy projects and enabling projects such as battery storage, we have also invested in geothermal and hydrogen, as well as food production from vertical farms to sustainable on-land fisheries.