Arisaig Partners has launched the Next Generation Fund targeting listed businesses in emerging and frontier markets.

The $3.8bn ultra long-term public equities investment boutique says investments will focus on firms generating positive social and environmental impacts and making significant contributions to addressing the shortfall in goods and services critical to the well being of underdeveloped populations.

Each investment contributes to improved outcomes in terms of quality or access, in relation to one or more of six themes – health, financial inclusion, education, employment, gender equality and the environment.

The investment universe comprises of about 150 high-quality companies delivering a positive impact and offering a sustainable runway for growth. Stock selection is based on analysis of a company’s investment case (expected financial returns over a 20-year horizon) and impact case (which uses the Impact Management Project’s five dimensions of impact framework), as well as Arisaig’s governance checklist and environmental and sustainability risk assessments. Additionally, companies are scored on three impact dimensions – reach, criticality and effectiveness – resulting in a concentrated portfolio of approximately 25 companies.

The Next Generation Fund is led by David Lanning, who has a decade of experience researching emerging markets, having worked across Arisaig’s regional teams in both Asia and Latin America. He will be supported by Lillian Wang, who joined the team this year. She is a former impact consultant who will be the fund’s impact assessment and engagement director.