These themes are where we believe the greatest impact investment opportunities lie. Catalyst’s investment mission is aligned with these themes and, in our opinion, is now, poised to deliver incremental value to private companies within this space. Specifically:
- Leveraging an integrated asset management model. The breadth of M&G’s asset class capabilities allows Catalyst to leverage in-house expertise. For example, the M&G private credit team can provide loans to Catalyst companies. Due to existing relationships, these loans can often be provided in a shorter time frame than would be the case with a third-party lender. Curtailing the due diligence to loan advancement timeframe could prove critical for the success of a business.
Another example of cross-asset class collaboration would include a £500 million co-development funding by the M&G Real Estate team together with Catalyst in a UK-based sustainable housebuilder.
- Flexible funding pathways. With a ‘patient capital’ approach, Catalyst addresses the ‘private-for-longer’ trend within the corporate sector. It is flexible and offers both IPO and private-for-longer funding pathways supporting future funding requirements. Further, benefiting from a stable and long-term internal investor, capital can be accessed when required allowing Catalyst to be genuinely innovative in terms of funding its portfolio businesses.
- Scale, reach, expertise. Maximising potential returns for investors depends on manager expertise and resource. M&G Investments, as an integrated asset manager, has in-house expertise across both private and public markets, together with specific research specialisms across the climate, health and social inclusion sectors.
Purposeful partnership
Despite the challenges facing private companies seeking support and funding for the growth stage of their development, established partners exist with the expertise and investment approach required. We believe these partners will be vital in order to effectively address some of the most pressing challenges the world is confronting.
Within the area of energy transition substantial long-term capital is required to develop emergent and transformative alternative energy sources (source: International Renewable Energy Agency, 2023). Meeting UN Sustainable Development Goals (SDGs) alone requires addressing a near $4 trillion annual funding gap in developing countries, according to UN Trade and Development (UNCTAD)2.
A willingness to remain a partner and seeking to make a positive impact for the duration of a company’s development are central to M&G Catalyst’s mission. With interests aligned with investee companies, we believe Catalyst continues to add investor value during a period of unprecedented global disruption and transition.
