Arcano Partners: Scaling Impact With a Fund of Funds (A)

Description

The case describes the setting up of an impact fund of funds (FOF) in 2019 by Arcano Partners, a leading Spanish independent asset management firm. Since its inception, Arcano Partners pioneered the FOF model in Private Equity and had recently launched two successful ESG-committed funds. Now, the firm is venturing into the impact investing space. The case centers around Jose Luis del Río, head of the PE division at Arcano, who is about to pitch to Caixabank - Spain's largest institutional investor - their first Impact fund, with the aim of closing them as the anchor investor. José Luis needs to decide whether to include thematic funds in the portfolio of Arcano's Impact FOF, but also whether it is worth deviating from their traditional buyout strategy and focus the FOF towards growth stage investments.

Learning Objective

The purpose of the case is (a) to help participants develop a better understanding of the impact investing industry and (b) the challenges of launching a fund of fund in this space. The case has several learning objectives: - Understanding the structure of the emerging space of Impact Investing within Private Equity. - The process funds follow in deciding how to position themselves in this space, which tradeoffs they face, and how they choose among them. - How various stakeholders might have different expectations and how fund manager can deal with this challenge and balance them. - What role can FOFs play in Impact Investing and whether they are an appropriate vehicle for this space. - Discuss the challenges of measuring impact in a FOF, where you need to aggregate impact across multiple funds. The case was prepared for an MBA-level elective class on ESG and Impact Investment, but it does not assume much knowledge of impact investing. Thus, as the case provide enough information on the impact investing ecosystem, it might be appropriate also for courses on Sustainability, Social Entrepreneurship, or even traditional Private Equity courses interested in shedding a light on an emerging trend.

Related Documents

• Arcano Partners - Scaling Impact with a Fund of Funds (B)
• Arcano Partners: Scaling Impact With a Fund of Funds - Teaching Note (A and B)

Keywords

Asset management ESG fund of funds impact investing Private equity responsible investing

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