LGT Venture Philanthropy, the impact investing arm of the Liechtenstein’s ruling royal family, and [tag|Berenberg|]Berenberg[/tag], the European bank, have announced the first closing of its fund, Impact Ventures UK, raising £20.8 million ($34 million).

LGT Venture Philanthropy, the impact investing arm of the Liechtenstein’s ruling royal family, and Berenberg, the European bank, have announced the first closing of its fund, Impact Ventures UK, raising £20.8 million ($34 million).

IVUK’s investors include the London Borough of Waltham Forest Pension Fund, Deutsche Bank, Stichting Anton Jurgens Fonds and The Golden Bottle Trust, in addition to the cornerstone investment of £10 million from Big Society Capital.

As explained in a recent article at WealthBriefing, impact investing – where the intention is to generate positive returns while achieving specific goals such as helping children’s education or improving the environment – is an increasingly common term. While still in relative infancy, interest in the area has grown. According to JP Morgan, in 2013 an estimated $9 billion will be allocated to impact investments globally – a niche investment area which represents a predicted market opportunity of up to $650 billion over the next decade.

IVUK concentrates on identifying businesses with specific and measurable positive social impact and a sustainable financial model. The proprietary impact assessment will be based on LGT VP’s global impact investment approach developed since 2007. The fund will target a financial return and the investments will be a mix of debt, equity and range from £500,000 to £5 million. The structure is a closed-ended SICAV-SIF fund in Luxembourg with a ten year term with two possible one year extensions.

“It will showcase social innovation and leadership, and will act as a catalyst to provide growth capital, strategic industry insights, management support and mentoring for social entrepreneurs. The fund has a broad mandate and will invest in enterprises with business models that target specific areas of impact, ranging from education, housing, employment and skills through to access to finance as well as mental and physical health,” it said.

LGT Venture Philanthropy works with LGT Group, the private bank. Berenberg, the bank dating back to 1590, operates in sectors including private banking, investment banking and asset management.