The Ethical Fund is a closed-end, hybrid fund focusing on investments in private equity and venture capital. It is available for well-informed investors (minimum investment Euro 125k). Our Parmenion Group colleagues at Nicanor are involved as sub-advisor. The Ethical Fund is a hybrid fund that invests globally via funds whenever best-of-breed managers are available, but the Fund will also invest directly in individual investment opportunities on an opportunistic basis.
The Fund aims for an annualized return of 17.25%.
The Ethical Fund follows our innovative ethical approach that encompasses two ethical screens. The first one is based on the guidelines provided by the United Nations Principles for Responsible Investment. The second is based on Islamic Finance and the guidelines of the Shariah. Islamic Finance represents a conservative approach in which ‘fairness in business’ and a balanced distribution of risks and returns between the end investor, fund manager and receiving investee play a pivotal role.
The Triple F Ethical Fund consists of 3 sub-funds (expected relative allocation and investment type in parentheses):
- Fair Finance Fund Europe (25%; direct investments);
- Triple F Ethical EMFM PE/VC Fund (25%; direct investments and funds);
- Triple F Ethical Global PE Fund (50%; funds only)
Fair Finance Fund Europe
The Fair Finance Fund Europe (FFFE) invests directly in European small- and mid-sized private companies that adhere to the double ethical screen. Investments will range in size from Euro 100,000 to Euro 5 million. The fund manager/general partner will follow an activist approach and focus on firms in industries or situations in which the general partner believes he and his team can add value over and above the financial contribution. Parmenion Group company Nicanor assists us by i) running an additional financial screen based on ‘Nico’, their bankruptcy prediction tool and ii) by presenting us with valuation analyses based on their proprietary ‘fair valuation’ approach in which multiple valuation methodologies are combined into one ‘fair value estimate’.
The sub-fund aims for an annualized return of 21% and it has a separate ISIN code so that investors who are only interested in FFFE (as opposed to the Triple F Ethical Fund as a whole) will be able to buy it separately.
Triple F Ethical EMFM PE/VC Fund
This Emerging and Frontier Markets focused sub-fund will invest in existing best-of-breed funds from other providers whenever they are available and comply with our double filter. However, Triple F Ethical EMFM PE/VC will not shun selected direct investments in those key sectors in which we (together with other Parmenion Group companies as sub-advisors) believe to have proven expertise and added value. Parmenion Group believes that our expertise as a Group is especially helpful within our ‘own’ financial sector and in sectors where the ‘digitalization’ of the global economy will initiate or be catalyst to a process of disruption of existing business models. These key sectors are:
- Financial Services
- Fashion & Luxury
- B2B Services
Nicanor will also act as sub-advisor to the Triple F Ethical EMFM PE/VC (sub-) fund in a similar fashion as it did in the Fair Finance Fund Europe (see above). Nicanor’s financial screens play an important role whenever this sub-fund will initiate direct investments. Unlike Fair Finance Fund Europe, the EMFM strategy is a hybrid one that will invest via funds when possible and ‘fill the gaps’ with direct projects when necessary and/or when we are offered via our extensive network in Emerging Markets ‘opportunities we cannot refuse’.
The sub-fund aims for an annualized return of 18% and it has a separate ISIN code so that investors who are only interested in the EMFM strategy (as opposed to the Triple F Ethical Fund as a whole) will be able to buy it separately.
Triple F Global PE Fund
The third sub-fund of the Triple F Ethical Fund is the Triple F Global PE Fund. This sub-fund invests solely via specialized, best-of-breed PE funds. The focus is global, albeit with a tilt towards developed markets and relatively larger portfolio companies (within the selected funds).
It can therefore be considered as the ‘anchor’ component of the Triple F Ethical Fund. Not just because it focuses on larger-quality and –size funds and portfolio companies, but also because it does so with a tilt toward safer, more developed PE/VC markets (main focus on North America, EU and Developed Asia-Pacific). And of course it is also important to note that we will allocate approximately 50% of the Triple F Ethical Fund to this ‘anchor’ block.
We will restrict ourselves to funds that can be classified as ‘best-of-breed’ and that comply with the double ethical/’fairness’ screen of Parmenion Ethical.
The sub-fund aims for an annualized return of 15%. We did not register the Triple F Global PE Fund with a separate ISIN code. Reason: we believe that those interested in a Global PE/VC strategy are best advised to go for the mix of Triple F Global PE, Fair Finance Europe and the EMFM Strategy, i.e. for Triple F Ethical Fund as a whole.
For more information about the Triple F Ethical Fund, please feel free to contact us.