Since launching its T2 Energy Transition Fund (T2) in 2018, private markets impact investor and global alternatives asset manager, Tikehau Capital has enhanced its approach to ESG, embedding it throughout the corporate business strategy and expanding its impact investment funds.
In 2022, Tikehau Capital pioneered the inclusion of ESG ratchets in deals within its flagship private debt funds, including its impact lending fund.
According to Tikehau Capital, this feature allows recipients of loans to receive more favourable financing conditions as they improve their sustainability goals. 50% of new portfolio companies included an ESG ratchet last year, with employee relations and climate change a focus.
Tikehau Capital intends to track the effects of ratchets on funds and underlying companies and sustainable investing data to make sustainable investing more efficient.
It also supported several social endeavours in 2022, particularly with a view to supporting economic recovery and innovation in the wake of the Covid-19 pandemic.
Tikehau Capital was appointed to manage the Belgian Recovery Fund, which will allocate "up to" €350 million ($373 million) to finance Belgian companies negatively impacted by Covid-19.
It was also entrusted by Pensioenfonds Detailhandel, the pension fund for the retail sector in the Netherlands, to manage a €100 million impact private debt mandate.
At a corporate level, Tikehau Capital has also implemented ESG within its corporate incentives:
- 20% of the team's yearly incentives are indexed to a collective target of climate and biodiversity assets under management (AUM) and a shared objective on talent retention.
- For all impact funds launched since January 2022, half of the carried interest allocated to the management company is linked to impact goals.
- More than 60% of the group's financing is linked to sustainability criteria, providing an additional incentive to accelerate impact strategies.
One Sustainable Investment Awards judge commended Tikehau Capital's "clear vision".
70% of Tikehau Capital's AUM (excluding real assets) are classified under Articles 8 and 9 of the European Sustainable Finance Disclosure Regulation (SFDR). As of 31 December 2021, Tikehau Capital had 19 ESG-labelled funds, representing €6.8 billion (this equates to roughly a quarter of the group's AUM).