North Sky sees a growing opportunity to provide liquidity in the impact investment market.
The Minnesota-based firm launched its first secondaries fund in 2013. A dozen years and three funds later, the market – in which limited partners and general partners can sell fund stakes to generate cash – is booming. Funds focused on buying impact stakes are still a rarity.
“There is a massively growing pile of impact private companies and AUM out there right now, and there is not an adequate pool of secondary liquidity solutions to support that,” North Sky’s Tom Jorgensen told ImpactAlpha earlier this fall. By his estimates, about 5% of capital raised for non-impact funds has gone towards secondary strategies; for the impact market, it’s about 0.1%.
In the market
North Sky is looking to raise $250 million for its fifth secondaries fund, according to an SEC filing. That’s about the same size as its most recent predecessor, which wrapped up fundraising just over a year ago. (The new fund’s numerical designation, Clean Growth Fund VII, reflects impact funds that pre-dated the secondary focus).
North Sky has picked up stakes at a discount in cleantech, recycling and the circular economy and healthy living companies, and has helped GPs set up continuation vehicles to hang onto prized assets. Among its more than 90 secondary investments to date are Crusoe Energy, a builder of renewable powered data centers, Amlon, which provides sustainable industrial waste solutions, and Hylands, a maker of natural vitamins and cold remedies.
In addition to secondaries, North Sky invests in sustainable infrastructure; it clinched its latest infrastructure fund in July.
