Despite hitting a global health emergency in the weeks following its launch, the founders of KC Impact are confident that staying true to their purpose will prove a winning strategy.
“Flexibility is essential in a volatile market and navigating the turmoil involves being flexible while also maintaining your values. That for me is crucial,” says Joaquín Camacho Calderón, founder and Managing Partner of the recently launched KC Impact.
KC Impact launched in February this year and, along with Investment Committee member and fellow IMD alumnus Peter Antolik, Camacho is optimistic about steering their young infrastructure investment manager through the medium term despite the COVID-19 pandemic.
The business was founded on the vision to develop social and economic infrastructure projects aligned with the UN sustainable development goals (SDGs) while generating attractive risk-adjusted returns for investors. Its mission is to invest in sustainable and climate-resilient projects in investment-grade countries.
“Powerful things can be achieved if you combine industrial experience and the investment view to greenfield projects,” says Camacho, who has worked in investment, corporate finance, asset and project management within infrastructure over the past 15 years. “Our projects address 11 out of the 17 SDGs. We create jobs, reduce inequalities, improve social mobility, reduce poverty, improve water sanitation and engage with governments to deliver – and these features are embedded in our strategy.”
Based in Madrid, Spain, the fund has targeted €200 million in investment in Europe, North America and Latin America across transportation, environmental and social infrastructure sectors and places its focus on developing future-proof solutions to the world’s pressing challenges. Since its launch, KC Impact has already completed its first investment in a water distribution company in Chile.
“Our strategy of investment permits us to navigate with a resilient asset class that endures strongly during times of uncertainty while making a direct impact on the communities and climate,” explains Camacho.
Antolik, a partner with Arjun Infrastructure Partners, also has extensive experience working with a variety of stakeholders, including company management teams, government, regulators, and the finance community. Having worked in core infrastructure sectors, such as utilities, airports, highways and oil storage over the past 27 years, he is well versed in the challenge posed by the climate crisis to the industry.
“Infrastructure and climate change are inexorably linked. Few industries are as tied to climate as infrastructure and climate is a big topic at the moment,” he says.
From the proliferation of distributed generation such as solar farms that necessitate a reconfiguration of power network systems, to water plants that must upgrade their sewage treatment facilities in order to be flood secure, investment is required, Antolik explains. By leveraging the SDGs and elaborating the key performance indicators (KPIs) to ensure transparent metrics, the fund offers investors the opportunity to have a real-world impact and achieve attractive returns.
For Camacho the priorities of a start-up are threefold: people, humility and transparency form the backbone of any new venture.
“People are the anchor; they set the direction and drive, the values and the view. Humility is also really important. We need to put our egos aside to really get the business off the ground. And thirdly transparency, to ensure business practices are completely clear and ethical,” he says.
Although they completed their IMD MBAs 12 years apart, Camacho (2013) and Antolik (2001) quickly recognized the common ground they shared when they came together to form KC Impact. Antolik recalls their initial meetings about the prospect of partnering on the start-up.
“When I realized Joaquín had completed the IMD program I knew it would be fun, I knew it would be purposeful. There is a shared perspective and values and that is very important,” he says.
And despite the negative economic outlook of the pandemic, which economists forecast will deepen the predicted downturn, the two convey a similarly steady outlook.
“We know that infrastructure projects are a good way for governments to create employment opportunities during a recession. Demand is also very resilient during downturns, especially in core infrastructure and other essential services,” says Antolik.
Camacho shares his colleague’s view but also re-emphasizes the underlying vision of their start-up as a crucial anchor point for any turmoil on the horizon.
“We have the main focus; our ethos, our purpose and within that we remain adaptive – not just through the pandemic,” he adds.
It is clear that KC Impact’s strategic purpose has enabled the necessary pragmatism and confidence for the team to face the medium term challenges and beyond.
