Louvre Fund Has Novel Way to Help Restore France's Old Monuments

(Bloomberg) -- The Louvre Endowment Fund -- entrusted with the upkeep of one of the world's oldest art collections -- has found a new way to generate returns so it can help restore France's castles and churches.

The Louvre museum's $289 million investment fund has invested in a so-called impact fund that will help preserve historical buildings and environmental parks. Run by a Paris-based private-equity firm called Alter Equity, the fund is the third such fund the endowment has backed to invest in everything from education to jewelry and shoemakers in France.

Impact investing is gaining traction with large institutions as investors seek ways to marry social, values-based or environmental goals with making money. The Louvre Endowment Fund has invested in such strategies in addition to hedge funds, emerging-market debt and energy-related stocks to boost returns, according to Chief Executive Officer Philippe Gaboriau.

“The missions of the Louvre are education, art and heritage, as well as artistic professions and tourism, which is why we invested in the impact fund,” Gaboriau said, adding that the endowment's returns have averaged about 6 percent annually.

Alter joins Apax Partners and Mirabaud private equity in managing impact investments for Louvre. Alter has invested in French companies including Remade Group, a smartphone refurbishment company; Innovafeed, a biotech company that uses protein from insects for animal feed; and Open Airlines, which focuses on energy efficiency and eco-driving software for airline companies.

Roughly 3 percent of the Louvre's overall portfolio is invested in private-equity funds with an impact strategy, a level that won't change for now, Gaboriau said. The Louvre is adding to its impact investments after slashing its holdings in equities since the end of last year.

Here's a rundown of how the endowment fund allocates its money:

• The fund has 30 percent in equities, down from 55 percent late last year
• The Louvre fund has steadily increased its hedge-fund exposure to 20 percent over the past two years, a level that it plans to maintain
• 4 percent of its assets are in energy stocks
• The endowment increased its holdings in emerging-market debt to 10 percent from 7 percent at the end of August

To contact the reporter on this story: Suzy Waite in London at swaite8@bloomberg.net

To contact the editors responsible for this story: Sree Vidya Bhaktavatsalam at sbhaktavatsa@bloomberg.net, Paul Armstrong

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