We recently hosted the Global Impact Investing Institute’s (GIIN) UK Members Event, where attendees were introduced to M&G Investments’ and Prudential Assurance Company’s (PAC) approach on how an asset owner/asset manager business model can harness capital to address pressing global challenges, while seeking to deliver returns. Our panelists from across the M&G group shared their key reflections from the discussion.
What is Impact Investing?
Impact investing means investing in companies that aim to deliver meaningful societal outcomes by addressing environmental and societal challenges, alongside financial returns. It goes beyond ESG integration by actively directing capital toward solutions — such as clean energy, inclusive finance, and sustainable infrastructure.
Reflecting on the panel, Thembeka Stemela-Dagbo, M&G Fund Manager, Sustainable and Impact Equities said: “When we back companies focusing on solutions we’re tapping into markets that are evolving rapidly. We are investing in the future economy.”
As well as addressing a need, impact investing has also been driven by customers. As Ciaran Mulligan, Chief Investment Officer, PAC explains: “PruFund Planet was a product of customer demand. We used the strength of the PruFund range to develop a product with a greater focus on positive environmental and social outcomes, allowing us to meet a wider range of customer expectations.”
According to the GIIN State of the Market 2025 report, momentum in impact investing continues, Impact Assets Under Management has increased at a compound annual growth rate of 21% over the past six years and an 11% increase in the past year.
Inside the Playbook: How Asset Owners Are Mobilising Capital into Impact
1. Seed Capital
The scale of PAC’s £130bn With-Profits book enables flexibility to invest across asset classes, public and private, and in both developed and emerging markets. “One of the most powerful roles we can play is anchor investor, offering seed capital to incubate new strategies. We work closely with our fund managers on innovation, co-creating strategies and pursuing new ways of investing” stated Mulligan.
Stemela-Dagbo added that PAC’s With-Profits Fund first impact investment in public listed equities was at a time when the space was emerging and largely untested. Initial seed capital of around £20m seven years ago enabled M&G to be an early mover and today is a strategy of around £3bn AUM, the patient capital enabled the team to develop a track record of success, catalysing the development of further impact strategies.
In the private market, there is no better example of this than PAC’s With-Profits Fund seeding of £4.5bn in Catalyst in 2021, launching new equity and credit funds with a focus on backing impactful private growth-stage companies that are looking to solve critical societal and environmental challenges.
2. Backing the Companies of the Future Economy
Through the expertise of our Catalyst team, backed by PAC’s With-Profits Fund, £25 million was invested in Reactive Technologies, a UK and Finnish deeptech, grid stability measurement company. Their GridMetrix® service reduces reliance on fossil fuels because it accurately measures the stability of the grid, aiming to provide greater confidence in the use of renewable energy.
Reactive launched its flagship grid stability measurement service with the UK’s National Energy System Operator (NESO) in 2021 and was recognised as a Clean Power Energy Transition Changemaker at COP28 for their partnership on the deployment of the world’s first inertia measurement technology. Their GridMetrix® service is estimated to be saving approximately 18 million tonnes of CO2 annually for the UK power system and is projected to save NESO £72 million over the contract lifetime on balancing inertia costs, translating to annual customer savings of around £14.4 million.
3. The Power of Partnership
M&G’s approach is multi-tiered, building deep internal impact expertise and leveraging PAC’s long-term, patient capital, to develop a network of investible opportunities.
Zachary Webb, Head of EMEA Investments, M&G Catalyst said a benefit of working with the PAC team was that as a long-term investor, they use sophisticated economic modelling to uncover long-term trends such as demographic shifts, climate change, and technological innovation. Thus, they were very aware of the challenges that are shaping the future and to be the potential drivers of returns over time. The Catalyst strategy was designed in partnership with them to invest in the technologies and innovation that could address these challenges.
Paul Hailey, Head of Impact & ESG at responsAbility agreed that through long-term partnership, impact investing has the potential to deliver both performance and positive outcomes, which is evident in the PAC-backed responsAbility Sustainable Food Latam strategy, which focuses on moving Agriculture and Food value chains to more sustainable practices.
Together, PAC and M&G Investments have helped develop solutions covering health, food systems, nature & biodiversity, climate solutions and diversity and inclusion. Providing clients a suite of opportunities to align their capital to scalable solutions to global challenges.
Looking Ahead
The GIIN UK Network event showcased the growing momentum behind impact investing and the critical role of institutional capital in getting behind the businesses of the future.
“For PAC the next five years will be about pushing boundaries – finding new sources of uncorrelated returns and innovating beyond traditional asset class labels. We expect more fluid mandates like Catalyst, blurred lines between public and private markets, and strategies co-created with managers to deliver both performance and impact.” — Ciaran Mulligan, Chief Investment Officer, Prudential Assurance Company (PAC)
Find out more about M&G Investments and Prudential Assurance Company