Impact Investing Pioneer Waits for the Big Money to Step Up

(Bloomberg) -- Almost three years after starting her first impact investing fund, Susanna Campbell still finds her market a bit lonely at times.

While powerhouses such as KKR & Co., Blackstone Group Inc. and Carlyle Group LP are all stepping up investments that drive environmental sustainability, far too much money is still missing out, according to Campbell, who manages the Norrsken Founders Fund and is also one of the early investors in Swedish battery startup Northvolt.

“There are still more investment opportunities than there is capital,” she said. “Just looking at our deal flow, I would say there still aren’t that many players in this space.’’

Studies by consultants such as McKinsey, PWC and the Global Impact Investing Network show that the UN Sustainable Development Goals are severely underfunded. There’s only about $500 billion currently dedicated to impact investing, far below the $7 trillion to $8 trillion needed to reach the goals by 2030. On a positive note, impact investing did double last year, but still only represents 0.5% of total assets managed worldwide.

The 46-year-old Campbell is former chief executive officer of Swedish private equity firm Ratos AB. She’s also adviser and board member of Northvolt, the Swedish battery maker, which she says has “the vision to take carbon dioxide out of the transportation industry.”

“A great example of how you can ride a strong and fast transition trend and at the same time also build a very good business,” she said.

Northvolt is currently building factories in Sweden and in Germany, as part of a vision to create a European battery industry to take on the Chinese.

She’s also in charge of impact investments at Norrsken, a 300 million-krona portfolio of startups. It has a who’s who of backers, including Niklas Adalberth, who’s behind digital payments powerhouse Klarna, Sebastian Knutsson of Candy-Crush Maker King Digital Entertainment Plc, Filip Tysander of watch brand Daniel Wellington and Carl Manneh who helped start Mojang AB, the developer of Minecraft.

The Norrsken portfolio consists of investments in 20 early stage companies with tech solutions to handle problems in areas like food waste, e-health and green energy.

Campbell said she expects large Swedish private equity companies such as EQT and Nordic Capital to soon also start impact funds. Earlier this year, Jan Stahlberg, the co-founder of EQT, left the firm to join forces with Nordea Bank Abp and founded Trill Impact, a fund targeting non-listed companies with strong sustainability targets.

“I hope and believe impact investing is going to become mainstream, as it’s based on very strong macro trends,” she said. “It’s built on things that must happen.”

Here are some companies in the Norrsken portfolio:

• Matsmart. The company helps food giants such as Nestle SA sell products that are about to expire or have faulty packaging. Germany’s Metro AG also invested in the last funding round through its investment arm, LeadX Capital Partners.
• Einride. The developer of autonomous vehicles recently raised $25 million to fund an expansion to the U.S. It’s also backed by EQT and Ericsson Ventures, among others.
• Heart Aerospace. Develops electric planes for commercial use. Also backed by California innovation fund Y Combinator.

To contact the reporter on this story: Rafaela Lindeberg in Stockholm at rlindeberg@bloomberg.net

To contact the editors responsible for this story: Jonas Bergman at jbergman@bloomberg.net, Niklas Magnusson

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