TPG Growth to launch social impact fund with Elevar Equity
TPG Growth, part of major global private investment firm TPG, is planning to launch a social impact fund. The group, which has previously invested in Airbnb and Uber, will establish the Rise Fund in partnership with Elevar Equity. The fund, which is expected to ultimately invest over $1bn and to achieve at least market-rate returns, will use metrics to assess the social impact of its investments. TPG Growth and Elevar will also work with the Bridgespan Group which has previously co-operated with the Gates Foundation and the Omidyar Network, the philanthropic body established by eBay founder, Pierre Omidyar.

The new fund, which has been in the works for about a year, is the latest entry into social impact investing. Most impact funds have been run by smaller investment firms, though last year Bain Capital announced that it had hired Deval Patrick, the former Massachusetts governor, to oversee what it called its Double Impact fund.

Overseeing the effort by TPG Growth is William E. McGlashan Jr., who in 2013 moved his family to India for a year to help oversee the firm’s investments in developing countries in the region. Among its more prominent investments is in Apollo Towers, which runs cellphone towers in Myanmar and which the firm has promoted as having helped spur mobile phone use in the country.

Investments by the Rise Fund will most likely look similar to the one in Apollo Towers, which has generated strong returns. TPG Growth expects returns from the new fund to produce, at minimum, market-rate returns.

A study published last year by Cambridge Associates and the Global Impact Investing Network found that on average, impact funds that had raised less than $100 million outperformed their nonimpact counterparts, though those that had raised over $100 million tended to lag in returns.

One major element of the Rise Fund is that it aspires to have rigorous metrics that quantify the social impact of its investments, the people with knowledge of the matter said. To that end, TPG Growth and Elevar plan to work with the Bridgespan Group, which has worked with the likes of the Bill and Melinda Gates Foundation and the Omidyar Network, the philanthropic organization of Pierre Omidyar, the billionaire founder of eBay.