What’s a Latin American impact fund manager to do? High interest rates make local capital hard to come by. Many US investors are in retreat. And the Middle East, in recent years a rich source of funding, is mired in conflict.
That leaves Europe, with its mission-aligned investors, stable regulatory environment and growing affinity for the kind of climate opportunities and nature-based solutions in which Latin America excels.
“The likelihood of identifying investors with a natural alignment of values, principles, and capital intentionality toward sustainable investments is materially higher in Europe,” said Pedro Vilela, founder of Rise, a São Paulo-based climate and nature fund.
“Unlike in other markets — such as the United States — where climate considerations can become subject to political and ideological cycles, Europe has advanced a more consistent, science-based framework.”
There’s room to grow. Latin America receives just 8% of the European impact capital deployed outside the continent, the smallest regional allocation, behind Africa and Asia. Europe’s private impact investing market has grown to more than $200 billion, according to the European Impact Investing Consortium, while fundraising for Latin American impact fund managers has been flat for years.
“There’s growing interest among European investors in Latin America, driven in part by the region’s strength in nature- and biodiversity-based solutions and its abundance of natural capital,” Kevin Kenny, a partner at the Amsterdam-based family office Blink Impact, tells ImpactAlpha.
Some European investors are trying to get closer to the action. Switzerland’s Elea Foundation, after years of trying to invest from Zurich, sent a team member to Mexico City in 2023. The foundation now counts six investments across nature-based solutions, agricultural value chains and climate-linked livelihoods.
Other European investors are following. ALIVE Ventures’ $55 million second fund brought in Impact Fund Denmark’s first investment in Latin America and Proparco’s first venture capital allocation in the region.
Madrid-based Mundi Ventures raised $100 million for its first Latin America fund focused on insurance and financial protection, backed by IDB Invest, COFIDES and regional insurers.
European tour
Rise, which targets growth-stage companies in Brazil tackling challenges in climate, nature and sustainable agriculture, spent two years meeting with insurers and family offices in Paris, Frankfurt and Amsterdam that had little prior exposure to Latin America. It has brought in commitments from German insurer Hannover Re and France’s CNP Assurances for its second fund, which is targeting $100 million.
Its first fund, launched in 2021 and fully invested at $30 million, backed companies such as Alba Energia, which finances clean energy projects in Brazil. Rise’s current fund, Biomes, has invested in companies such as Solinftec, which uses robotics and AI to reduce chemical use on farms.
For Vilela, the process of pitching European investors was refreshingly straightforward. Interest rates in Brazil are nearing 15%, pulling capital into government bonds and away from higher-risk private markets. In the United States, some of the largest impact investors have pulled back or reassessed their climate and development commitments.
Europe’s Sustainable Finance Disclosure Regulation has created a common language around impact.
“The result is a more transparent, disciplined, and credible investment ecosystem,” Vilela said.
Family offices
At Blink, Kenny is working with other family offices to draw more European capital and interest to Latin America.
For example, Meraki Impact, also based in Amsterdam, has invested in SP Ventures’ AgVentures Agricultural Tech Fund in Brazil and Deetken Impact’s Caribbean Basin Sustainable Energy Fund. Nest, a Belgian family office, also supported SP Ventures, which closed its third fund at $50 million.
“Latin America is well positioned to attract that kind of capital, given its alignment with more forward-looking, climate-focused investment opportunities,” Kenny says.
Blink backed EcoEnterprises Fund’s third fund, which invests in sustainable agriculture, agroforestry and ecotourism businesses across Latin America. Wire Group, a Netherlands-based impact fund of funds, recently backed EcoEnterprises’ fourth fund
“You need an anchor,” Kenny emphasizes. “One credible investor for others to follow. That’s how ecosystems work. It’s all built on trust.”
See which European families are backing Latin America’s impact funds on ImpactAlpha’s Edge platform here.
Joint venture
In Mexico, New Ventures Capital spent more than a year working with Spain’s Ship2B Ventures to pair European investor networks with Latin American climate, health and inclusion startups. The result is the New BSocial LatAm Fund, jointly launched by the two firms at this year’s Latin American Impact Investing Forum, or FLII, in Mérida, Mexico.
“New BSocial is really the joining of two ecosystems,” New Venture Capital’s Matteo Gilliotti tells ImpactAlpha. “We’re leveraging each other’s best capacities: Ship2B’s knowledge of European investors and impact measurement, our knowledge of Latin American entrepreneurs.”The fund combines Ship2B’s European investor network with New Ventures’ sourcing capabilities across five Latin American markets. Spain’s development agency, AECID, anchored the fund, with additional commitments from development financing institutions FMO, Proparco and BIO. Ship2B is targeting a first close of $20 million to $25 million this year.
