Impact investing is still in and M&G’s Catalyst strategy’s stellar traction proves it.

M&G - a leading international savings and investment business, manages over £371 billion globally on behalf of banks, pension funds, family offices, and sovereign wealth funds.

Of this, Catalyst holds $1.5 billion in growth equity assets under management, focusing on growth-equity investments by providing scale-up capital for purpose-driven businesses.

“We have spent the last five years providing scale up capital across the UK and Europe, leading rounds for management teams and founders who are trying to build big and impactful businesses globally,” Alex Seddon, Head of Impact & Private Equity at M&G Investments, told European Women in VC. “We’ve been able to do this because of the size of the strategy, and because of the fact that a large part of its international  team sits in London and we have a pool of capital from M&G’s Life business.”

European scaleups face a consistent Series B hurdle when fundraising, and often rely on foreign investment to secure the capital. M&G aims to close this gap by spearheading domestic capital into European startups at the later venture stage.

A granular investment thesis

Seddon traces the strategy’s investment thesis back to its inception in 2020. “The core idea was that the long-term saving pools were under-allocated to certain themes. Specifically, we designed it with potential, profits, and M&G’s Life business in mind,” he said, pointing to how half of M&G PLC’s AUM is asset-owned capital.

The key themes the fund focuses on include climate and energy (which the fund has now billed as ‘planetary health’), human health, access and inclusion, and enabling technologies.

“One of the biggest changes in the global economy is the need to decarbonise, to electrify the economy, and also to move to a more sustainable economic model. Of the capital we've deployed in the last five years, about half it's been in that theme,” Seddon said. Notable investments in this sector include crop protection startup BioFirst, energy storage startup Form Energy, and Tier Mobility, which merged with Dott in 2024.

Healthcare innovation has also been an important focal point. Seddon highlights the ageing population as a huge concern for healthcare systems across Europe. Technology has also provided a huge opportunity to improve healthcare outcomes, he noted. Case in point, M&G has backed the likes of AI healthtech Amboss, CytoReason, and Innovaccer.

While access and inclusion appears to be a catch-all bucket, this category entails the technology being applied to provide access to basic services and products that would otherwise not be made available to communities in different countries, such as Indian small-business supplier Udaan.

“The fourth category, enabling technology, is kind of an underpin. How is technology being applied to make significant progress across these impact themes?” The portfolio includes everything from satellite imaging startup Pixxel to drug discovery company Nuclera, he said.

In the past five years, the fund has deployed a hefty 1.3 billion dollars directly into growth equity - writing cheques of between $25 to $50 million along the way. It also reserves money to follow up into succeeding rounds. Members of the Catalyst team are also an active board participant for its portfolio companies in a bid to “help the business through the difficult scaleup period of its growth journey,” Seddon added.

The UK’s untapped potential

As a global technological leader, the UK provides startups with a fertile environment to both invest in research and development, and fundraise.

“When you look at the foundational science, the UK is incredibly strong in that kind of research, whether that’s biotech, quantum or AI,” Seddon said. “Then you have the university spinout ecosystem, which is high quality.”

Indeed, UK spinouts have raised over $19.2 billion in VC funding since 2020, per a Dealroom report, making it Europe’s largest spinout market.

While the early-stage market is robust, funding typically drops off at the later stage which is typically when US funds swoop in, Seddon adds. Still, there’s huge potential for domestic investors to catch up.

“Long-term saving pools are under-allocated, and that’s a structural problem. There’s been a bit of a de-equitisation of pension funds in the UK and they’re less structurally inclined to invest in VC. Most long-term saving pools were under-allocated and missed that opportunity in the last 20 years, so let’s not make that mistake, especially when the fundamentals are so strong,” he noted.

Reforms such as the Mansion House Accord have certainly helped pave the way. “The government has been helping people in the right direction. People can decide if they want to allocate or not, and we think growth equity is more attractive because you can allocate larger tickets to single GPs,” he said.

Leaning into diversity for long-term gains

As an impact fund, Seddon has found that tracing the flow of capital through its entire life cycle has been conducive to the fund’s success.

“One of the obvious tradings of the market is how female-led GPs or mixed teams are structurally underfunded,” he said. “This is clearly not good, and we’ve been actively trying to do something about it by investing in female-led GPs and decision makers.”

It’s no secret that diverse teams perform better; they have more expansive perspectives and networks, which helps drive superior returns.

Catalyst has already allocated $50 million to this strategy, and is allocating another $50 million through the IWT process.

Having a mission-driven team has also been a key lever of success for the fund, Seddon adds.

“The core purpose of the team has to be driving impact, and you have to be rigorous in the way you underwrite that,” he said. “You want that clear alignment, and the governance helps you demonstrate that to potential LPs, so you need that consistency and alignment.”

Ultimately, the UK and Europe hold huge impact opportunities, and M&G has found a purple patch to cultivate its footprint in the continent’s impact sector as well as further afield.

“The investment universe needs to be on the radar of more investment funds,” Seddon said. “If you went back 10 years, that wasn’t there, so it’s a function of how much our innovation economy has matured,” he pointed out.

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Alex Seddon is Head of Impact and Private Equity at M&G, the London based savings and investment business. He has been investing in public and private markets since 2003 and held a number of private market investment leadership roles at Prudential and M&G since 2011.  

He established M&G Catalyst in 2021, which is a $6Bn global investment mandate focused on helping purpose driven businesses succeed and scale. The strategy is focused on the application of innovation and technology to solve problems across Climate, Healthcare and Inequality. 

Alex is a member of the Advisory Board for the Institute for Carbon Management at UCLA,  the Advisory Council for the Impact Investing Institute, and the UK Government’s Invest in Women Taskforce.

M&G Investments is part of M&G plc, a savings and investment business which was formed in 2017 through the merger of Prudential plc’s UK and Europe savings and insurance operation and M&G, its wholly owned international investment manager. M&G plc listed as an independent company on the London Stock Exchange in October 2019 and has £371 billion of assets under management (as at 31 March 2026). M&G plc has customers in the UK, Europe, the Americas and Asia, including individual savers and investors, life insurance policy holders and pension scheme members.