M&G has announced that its £136 billion With-Profits Fund is to allocate up to £5 billion into sustainable private enterprises.

M&G has created a new global investment team called Catalyst, with presence in London, Singapore, New York and Mumbai that can invest in private credit, real and financial assets and private equity. Examples of investments include SME and consumer financing, such as microfinance and trade receivables; asset and development financing such as affordable housing and energy from waste facilities, and technology investments with a positive social or environmental purpose. The beneficiaries of this new strategy are customers in the Prudential With-Profits Fund, which includes PruFund. Catalyst will sit within the Private & Alternative Assets business at M&G.

Catalyst will have a broad impact focus that flexibly encompasses ESG risk management through to positive impact for vulnerable groups. The team will use the Impact Management Project’s investment classification framework to assess potential opportunities in three categories:

1. ESG – those businesses or assets which act to avoid harm;

2. Sustainable – those which benefit stakeholders by generating positive outcomes for people and the planet; and

3. Impact – those contributing solutions to societal and environmental challenges.

Screening to ensure businesses act to avoid harm will be based on criteria already established for all M&G ESG funds, which exclude sectors such as gambling, tobacco and controversial weapons.