Why We Invested in Kin Insurance

By Rahul Bhide, Vice President for Economic Opportunity, and Mohit Jindal, Senior Associate for Environmental Sustainability

In recent years, the U.S. homeowners insurance market has been under intense strain, especially in states vulnerable to natural disasters. Climate change is increasing the frequency and severity of catastrophes, such as hurricanes, wildfires, and floods, while inflation and supply chain disruptions have driven up repair costs. Many traditional insurers have responded by raising premiums sharply, pulling back from high-risk regions, or exiting markets altogether, leaving millions of homeowners with few, if any, affordable coverage options. This growing protection gap disproportionately impacts families in coastal and disaster-prone areas, threatening both their financial security and the resilience of their communities.

Solution

Kin Insurance is a direct-to-consumer home insurance company that uses technology and data analytics to offer customizable, competitively priced coverage in catastrophe-prone areas often underserved by traditional insurers. Founded in 2016, Kin operates as a fully licensed carrier in several U.S. states and distributes policies directly to customers, disintermeditating the traditional broker channel and reducing costs. The company simplifies the buying process, offering transparent pricing, and using real-time property data to underwrite risks more accurately.

Why We Invested

The U.S. homeowners insurance market represents a massive and growing opportunity, with gross written premiums reaching $170 billion in 2024, up 11% year-over-year. Florida, Texas, and California, where Kin is already active, account for roughly one-third of that market, or $54 billion. Kin’s focus on these large, high-value geographies is strategic: they are markets facing both outsized climate risks and significant dislocation, where traditional insurers have raised premiums sharply, reduced coverage, or exited altogether.

Kin’s technology-driven model is designed to serve precisely these high-need areas by protecting the most important financial asset for middle-class Americans - their homes. Through granular, property-specific underwriting, Kin can better price and manage risk across multiple perils like hurricane, flood, wildfire, and more, while delivering a superior customer experience with faster quotes, claims notifications, and payouts. With its scale and track record, Kin has secured access to well-priced reinsurance and debt capital, resources unavailable to most smaller players, positioning it for sustainable growth. By combining market reach, underwriting precision, and financial resilience, Kin is building a durable platform to insure homes in the face of accelerating climate risk. 

Kin finished 2024 with $495.3 million in gross written premium and $156.1 million in total revenue. Kin's operating income for the year was $12.0 million, representing a 126% increase over the prior year.

Impact

Climate change has increased the severity and frequency of disasters, driving a 24% rise in home insurance premiums between 2021 and 2024. Additionally, different houses even in the same ZIP code face different levels of risk from climate change-related risks. Traditionally, legacy carriers price risk at a zip-code level, making it difficult for them to adapt their underwriting models and approach to price insurance policies for specific properties, and so faced with this challenge, they’re choosing to pull out of offering policies in high risk areas entirely. 

Kin takes the opposite approach: it applies property-level modeling by ingesting and analyzing thousands of data points about each property, enabling granular underwriting that is actuarially sound. That’s what enables Kin to enter and expand in such dislocated home insurance markets when others abandon them. Access to home insurance protects the most significant asset and source of wealth creation for middle-class Americans. Without it, borrowers can’t close or refinance mortgages, and communities rely on slower government-established plans (ex. CA’s FAIR plan) for coverage.

Why We Invested in Core Education

By Rahul Bhide, Vice President for Economic Opportunity

Higher-education institutions (HEIs) in the US are facing significant headwinds causing operational and financial sustainability challenges. Those headwinds include demographic changes, shifting sentiment on the perceived value of higher education, increased technological complexity from IT infrastructure to digital marketing, and deep competition for the right technological talent. Additionally, shifting from traditional business models to focus on non-traditional and workforce-based education continues to be a challenge.

Small and mid-market private higher education institutions, those under ten thousand students, face the brunt of these headwinds and are most vulnerable. Students at colleges that close are significantly impacted: more than 50% of students who are at a college that closes do not complete their education elsewhere, and 40M Americans have some college experience but not a degree, contributed to, in part, by closures. College closures also affect their communities; regardless of the institution size. Institutions are economic and social anchors for the communities to which they belong.

Solution

Core Education is a mission-critical operating partner and specialized services provider focused on transforming higher education institutions. Core’s integrated services span revenue diversification, technology modernization, and financial sustainability, enabling colleges to adapt to demographic shifts, declining full-time enrollments, and financial pressures.

Why We Invested

Core Education has an impressive team, led by Kamalika Sandell and Rick Beyer, supported by a senior leadership team with deep higher education, finance, and technology backgrounds, including a number of former college presidents who have successfully addressed the challenges that their partner institutions are now facing. The company has grown revenue significantly over the past few years and has operated in a capital-efficient manner.

Core’s offerings enable their partner institutions to achieve financial resilience, sharpen workforce offerings, and connect with employers. Existing solutions and players in the space are typically only able to offer point solutions or services; Core’s ability to offer comprehensive integrated solutions with sector-specific expertise is a key competitive differentiator and makes a significant difference in institution outcomes. Their results have made them a trusted partner.

Impact

Core delivers business model transformation to a critically underserved segment of higher education. The company’s institution partners are typically significantly underserved and are often regional, under-resourced, or tuition-dependent, unable to access talent and technology in the same manner as larger institutions. Core closes that gap through a fractional model, delivering embedded, high-impact capabilities typically reserved for larger institutions. Its integrated solution offerings span revenue strategy, financial modeling, enrollment performance, workforce development, and digital transformation. Their ability to help institutions engage with employers and develop workforce development initiatives enable institutions to improve potential educational outcomes for their students. Their comprehensive solution and service set also helps stabilize institutions financially, enabling colleges to continue offering quality educational outcomes for their students, and continue to contribute to their communities. 

Why We Invested in Retirable

By Rahul Bhide

The retirement crisis in America is no longer looming—it's here. With over 10,000 baby boomers turning 65 every day and nearly half of U.S. households at risk of not being able to maintain their standard of living in retirement, the need for innovative solutions has never been greater. That’s why we invested in Retirable, a company redefining how people approach financial wellbeing in retirement. By combining personalized advice, accessible digital tools, and a mission-driven approach, Retirable is tackling one of the most urgent and underserved challenges in financial wellness.

Solution

Retirable is a retirement planning, investing and spending solution with the ongoing care of a fiduciary advisor. The company works to build financial plans for older Americans, helps them develop a 'safe-to-spend' number, manages their assets (like a 401k/IRA, etc.), and issues a monthly “paycheck”. There are three main aspects of the solution:

Access to human advisors: Clients work with an advisor to plan their retirement, including required cash flows, timing, and goals. Retirable’s AI-enabled technology platform helps advisors do this. After becoming a client, their human advisor meets with them at least once a year to revisit the plan.

Managing retirement accounts: After someone becomes a client, Retirable begins managing their retirement accounts (401Ks, IRAs, brokerage accounts) and segments the assets into three buckets; a year’s income in high-interest checking, five years’ in a synthetic personalized bond ladder, and the remainder of assets in low-cost ETFs. The bond ladder is refilled using investment gains; in down years, the bond ladder is drawn upon. All of this automated rebalancing is done by the Retirable technology platform.

Issuing monthly paychecks: Based on the planning done by the client and the advisor, Retirable issues a monthly “paycheck” to clients. This is also automated by the Retirable platform, enabling clients to continue their financial life that they used to have when collecting a paycheck.

Why We Invested

The Retirable team, led by Tyler End and Ian Yamey, have been deeply embedded in this product space and distribution channel for the majority of their careers, and they’ve built a product offering that is appealing to retirees who have been traditionally underserved and deprioritized by current retirement advisors and solutions. We’re excited to back the team to continue to scale the company, deploy AI to enable advisors to serve customers more efficiently at scale, and support Americans in a critical period of their financial lives.

Impact

Retirable serves mass-market American households, a core focus of our Economic Opportunity strategy. 63% of their customers have never worked with a financial planner before, and most of the balance have relied upon a friend or family member to set up a plan for them. Access to financial planning has been shown to drive more resilient and worry-free retirement strategies; Retirable’s model is designed to support clients during periods of market volatility, aimed at helping them stay invested and avoid reactive decision-making.

There is a well-documented increase in stress and lowered mental wellbeing closer to retirement driven by uncertainty and anxiety with finances that can also impact physical health.

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References to products or services offered by portfolio companies are for informational purposes only and are not endorsements or recommendations for use.

Bernstein Private Wealth Management Deepens Partnership with Impact Engine

Bernstein Impact Alternatives II fund will invest in venture and private equity funds driving measurable impact across economic opportunity, environmental sustainability, and health equity.

NEW YORK, February 19, 2025 — Bernstein Private Wealth Management (“Bernstein”), a unit of AllianceBernstein L.P. (NYSE: AB), today strengthened its purpose-driven platform as it announced the final close of Bernstein Impact Alternatives II (“BIA II” or “Fund”). The Fund, which was created in partnership with Impact Engine—an independent, women- and BIPOC-led, and employee-owned asset manager investing in venture capital and private equity strategies—received more than $40 million of commitments.

BIA II is the second purpose-focused fund offered as part of Bernstein and Impact Engine’s unique partnership. Like the inaugural Bernstein Impact Alternatives fund, which held its final close in December 2022, BIA II is exclusive to Bernstein clients and aims to combine meaningful and measurable impact across companies that are committed to improving economic opportunity, environmental sustainability, and health equity.

Bernstein Impact Alternatives funds form a part of AllianceBernstein’s Portfolios with Purpose platform. AB’s Portfolios with Purpose totaled $29 billion in assets under management as of September 30, 2024.

“We are thrilled to be expanding our partnership with Impact Engine following the continued success of our inaugural Bernstein Impact Alternatives fund,” said Alex Chaloff, Chief Investment Officer of Bernstein Private Wealth Management. “Our combined expertise is critical in meeting our clients’ increasing demand for impact-oriented opportunities that make a tangible impact across communities. Bernstein Impact Alternatives are funds that address two deeply held beliefs: that providing primary growth capital to private companies is one of the most impactful ways to invest, and that investing in private equity and venture capital will improve client risk-adjusted returns.”

Impact Engine was founded in 2012 with the goal of aligning financial returns with positive impact outcomes. The asset manager partnered with Bernstein in 2022 in response to growing demand among high-net-worth individuals for impact-driven strategies, leveraging its unique vantage point and ability to deploy capital across both venture and private equity capital stages of companies.

“Interest from private wealth investors in impact-oriented funds continues to grow and we expect the same in the coming years as more families realize the potential to align financial and social returns” said Jessica Droste Yagan, Partner and CEO of Impact Engine. “We are proud to be on the leading edge of building this highly specialized investment area that requires distinct expertise and focus, and to do so in partnership with AllianceBernstein. The need for impact capital has never been greater, and the level of innovation and entrepreneurship in the field has rarely been higher.”

About Bernstein Private Wealth Management
Bernstein Private Wealth Management advises ultrahigh- and high-net-worth clients on planning for—and living with—the complexities that come with significant wealth. Bernstein is distinguished among major wealth managers by its expertise in navigating life’s transitions through a holistic approach. A flexible process—paired with innovative research, sophisticated modeling, and cutting-edge investment solutions—also set Bernstein apart. Headquartered in Nashville, Bernstein is a business unit of AllianceBernstein, which ranks among the largest investment managers in the world, with offices in major world markets across 26 countries and jurisdictions and over $792 billion in assets under management.*

For additional information, visit Bernstein.com.

*As of December 31, 2024

About Impact Engine
Impact Engine is a women-led and employee-owned asset manager that has been working to build the impact investing industry since 2012 through investments that deliver attractive risk-adjusted returns and deep impact outcomes. Based in Chicago, Impact Engine invests exclusively in funds and companies that are driving positive impact in economic opportunity, environmental sustainability, and health equity. The firm, a Public Benefit Corporation, provides investment capital along all stages of the life cycle of an enterprise, from early-stage venture to growth and buyout private equity, and in funds across this spectrum. Impact Engine’s multi-faceted investment approach ensures that it operates at the center of the impact innovation ecosystem, giving the team unique access to differentiated, high-quality deal flow as well as comprehensive knowledge of the market. Impact Engine has over $244 million in assets under management as of 3Q:2024. To learn more, please visit www.theimpactengine.com.

Endorsements are provided by individuals who are invested in an Impact Engine fund and/or are associated with portfolio holding companies/funds and may therefore have an interest in the success of Impact Engine. No compensation was provided for the endorsements. AllianceBernstein’s assets under management (AUM) is based on the most up-to-date information as of December 31, 2024.

Media Contacts 

Bernstein

Katrina Clay

communications@bernstein.com

Impact Engine

Maggie Stohler

maggie@theimpactengine.com  

Legal code: BPWM-667328-2025-01-14

Why We Invested in Unison Therapy Services

By Sophia Friedman, Vice President for Health Equity

There are ~7.5M children with a diagnosed disability in the U.S., and special education (“SPED”) learners make up 15% of the total US student population. The number of SPED students has been growing since before the COVID-19 pandemic and continues to grow as more students are diagnosed earlier and need multiple services. Students with disabilities have been federally mandated to receive customized school support since the Individuals with Disabilities Education Act (IDEA) was passed in 1975. The IDEA law requires schools to meet Free and Appropriate Public Education (FAPE) requirements for children with disabilities. Children who fall under IDEA are put on an Individualized Education Plan (IEP) that legally requires them to have specialized instruction in their Least Restrictive Environment. As part of an IEP, students can receive specialized instruction, performance tracking & interventions, paraprofessional support and ancillary services such as speech, occupational and physical therapy. All of these services require specialized clinical staff. However, schools are structurally and operationally unable to hire clinicians to meet the demand for SPED students. As a result, outsourced vendors have increasingly been tapped to fill the supply gap.

Solution

Unison Therapy Services provides therapeutic services in Pre-K through 12 school- and community- based settings via over 190 school district partners and 12 community clinics in California and Colorado. The Company is a multi-disciplinary provider of services for children with developmental delays, autism, social and emotional developmental needs and behavioral challenges. The company currently offers services across California and Colorado, and its suite of offerings include behavior, speech, mental health, psychology, education and OT/PT. 

Why We Invested

Unison Therapy Services fills a critical need for therapeutic services for students that schools are unable to fill themselves and in communities where clinician supply does not meet patient demand. While schools are federally mandated to fill certain speech, behavioral, and other therapeutic service roles, these are extremely specialized and hard to staff for, leaving schools to look to outsourced vendors to fulfill federally mandated requirements.  Unison Therapy Services has a competitive advantage over others in this space in recruiting and retaining talent given their focus on competitive compensation, professional development and better matching of clinicians with districts. Further, the highly fragmented school-based market presents an opportunity for significant organic and inorganic growth. Relative to other players, Unison Therapy Services has a unique ability to provide a faster time to hire / fill school needs, maintain high quality of services and provide a diverse line of services. 

Impact

Currently, school districts are unable to hire and properly staff roles to address the needs of their SPED students. As more students are qualifying for IEPs and increasingly need multiple types of support services, there is a greater need for school-based clinicians to meet this demand. However, districts are unable to properly fill gaps as they are often unable to replace in-house staff that leave due to the specialized nature of the clinicians, the unionized nature of in-house staff (and resulting  inability to match clinician pay rates). Attempts to innovate around insourcing talent strategies at school districts have largely fallen flat. 

As a result, Unison Therapy Services has significant impact potential as the platform helps support SPED students. Key impact & ESG merits include:

• Clinician-founded company that has successfully scaled in California  providing on-site care to SPED students in both school-based as well as community-based settings.

• Improves access to high-quality therapeutic and behavioral health service offerings in markets where supply-demand mismatch leaves students without sufficient clinical resources.

• Community business targets underserved students, in rural and urban areas, who need affordable access to special education care.

• Enhances the quality of care to an underserved student base.

• Creates value by prioritizing organization, care coordination, data analytics and operating efficiency.

Why We Invested in NephroPlus

By Sophia Friedman and Anna Reilly

There has been a significant increase in both the number and severity of end stage renal disease (ESRD) and chronic kidney disease (CKD) cases in India over the past several decades. Of the estimated 1.3M individuals requiring access to dialysis services in India, only ~20% are receiving those services at the recommended frequency. This gap is primarily due to: 1) affordability as the average cost per session is price prohibitive to most; and, 2) supply side constraints given there is a significant gap in supply of dialysis machines, clinicians, and centers. Additionally, geographic location continues to serve as a barrier to access for individuals living in tier II or III cities versus tier I cities. While a number of private dialysis companies have been founded in India, few have been able to scale high-quality, affordable services across high-need areas. Similar challenges exist more broadly outside of India. In The Philippines and Uzbekistan, the number of individuals with kidney diseases continues to grow and the demand for services in these countries has far outpaced supply.

Solution

NephroPlus enables individuals suffering from kidney diseases to resume normal functioning of life through high-quality, cost effective dialysis treatments and services. NephroPlus is Asia’s largest chain of dialysis clinics with ~450 centers across 250+ towns in India, Uzbekistan, and The Philippines. The company offers services through both standalone centers and outsourced dialysis centers located in hospitals within tier I, II, and III cities, and through public-private partnerships. NephroPlus has an in-house dialysis staff training program, which both addresses supply side challenges and ensures high-quality delivery of services. During the last 10 years, more than 1,000 students have been trained and placed successfully at NephroPlus clinics. NephroPlus is well-positioned to serve the large and growing number of individuals with a need for high-quality, affordable dialysis services in India, The Philippines, Uzbekistan, and additional countries in Asia.

Why We Invested

The prevalence and severity of kidney disease cases continues to increase around the world, particularly across Southeast Asia. In India, The Philippines, and Uzbekistan, where NephroPlus operates, there is a significant supply-demand gap in terms of dialysis machines, centers, and clinicians required to care for individuals suffering from renal disease. To combat this discrepancy, the Indian government launched the Pradhan Mantri National Dialysis Programme, which partners with private providers to increase the number of centers, machines, and clinicians offering dialysis services in the country. The governments within The Philippines and Uzbekistan are also offering universal health coverage for these services through government partnerships. However, public programs alone will not be enough to overcome the gap in the number of needed machines. Further, these countries also struggle to properly recruit and train the number of nurses and technicians needed to provide care.

Given the need for machines, centers, and clinicians, NephroPlus is well-positioned to become a market leading provider of dialysis services across Asia. As a single specialty, multi-site provider of high-quality, cost effective dialysis services, NephroPlus will be capable of partnering with governments and outsourcing dialysis services for hospital and center partners. The NephroPlus founding team has extensive experience in the dialysis industry, including effectively scaling the company to ~450 centers since its foundation in 2010. Founder and CEO Vikram Vuppala founded NephroPlus with a clear objective to redefine and transform healthcare in India. Further, NephroPlus’s most significant investor, Quadria Capital, is committed to working together with the company to professionalize and optimize the business as NephroPlus continues to scale throughout Asia. The NephroPlus and Quadria Capital teams share a similar mission to build Asia’s largest network of dialysis centers offering high-quality, cost-effective services in countries with a significant need. 

Impact

NephroPlus addresses all three barriers to services: accessibility, quality, and affordability. The company plans to add hundreds of additional centers across tier I, II, and III cities with the majority of centers added in tier III cities, where there is currently limited access to dialysis services. NephroPlus maintains a highly-qualified clinical board and ensures cohesive standard operating procedures lowering infection rates across centers and markets. Additionally, NephroPlus recently announced the publication of a research study in The Lancet Regional Health - Southeast Asia establishing the first national benchmark for survival amongst dialysis patients in India. The company has partnered with the governments in both The Philippines and Uzbekistan to ensure public coverage for services. Within India, while the company provides the majority of services through government models, either through PPP or offering services under government healthcare schemes, while the rest of services are either private insurance or self pay. NephroPlus intends to continue to partner with the Indian government to provide services through public-private partnership models.

Why We Invested in Mae Health

By Sophia Friedman

The United States is facing a maternal mortality crisis. Maternal mortality rates in the US exceed rates in other high income countries (by more than ten times in some cases, such as compared to Australia, Japan and Spain). Specifically, Black women are most negatively impacted and are 3-4x more likely to die from pregnancy-related complications. Further, 15% of Black births are premature, 35% of Black births are via c-section, and Black women are twice as likely to experience pregnancy-related complications. Various factors drive this inequity in care including access to care, social determinants of health (SDoH), and structural racism. Notably, structural issues such as implicit biases of caregivers and a lack of cultural competency materially contribute to these outcomes. 

Solution

Mae Health is a culturally competent digital health platform connecting Black expectant mothers with critical resources to elevate the standard of care for Black women, with a focus on improving maternal health outcomes. Mae works in concert with healthcare payers and states to address the significant disparities in maternal health outcomes for Black mothers across the country by pairing a community-based model of doula support with best-in-class digital interventions.

Mae’s core offerings include continuous digital engagement and culturally aligned support. The continuous digital engagement provides multi-modal touchpoints such as culturally aligned content, virtual, small group ‘Mae Momma classes’ that offer programming on specific topics, SDoH monitoring, care flags to identify risks early and track data, and analytics to share with healthcare providers and payors. Mae’s culturally-aligned support offers virtual or in-person perinatal support from credentialed doulas. Mae connects expectant mothers with doula networks for the provision of care and also provides various levels of support to doulas including a client management interface, workflow tools, and billings and claims submission support.

Why We Invested

We believe that Mae’s approach is unique as it is entirely focused on reaching Black expectant mothers, and their sales traction to date has been 100% with Medicaid payors (though the company does have D2C users who can access free content). Some competitors have avoided contracting with Medicaid payors because of the complex reimbursement dynamics that vary by state, and inherent challenges to engaging these patient populations, but Mae has tackled this head-on and is a first mover in this space. Mae has proven a  strong value proposition to payors by clearly mapping the cost savings of providing doula support and has seen great success with signing and launching new Medicaid payor contracts in recent months.

Further, the doula-centric approach is also unique, and Mae has made progress ahead of other players in building out a bench of doula talent. While there are several players in the maternal health market broadly, Mae’s approach is unique in its focus on optimizing doula benefits for Medicaid populations. Doula support has been directly linked to improved health outcomes as women who give birth with a doula present have a 22% lower risk of undergoing a c-section. By employing this model, there is significant impact potential in a market that not many companies have been willing to focus on. Lastly, the team is extremely impact motivated and brings relevant lived experience to the platform. Founder and CEO Maya Hardigan has prior experience on the innovation team at Pfizer and as the mother of three young girls, she has personally experienced the inequities that she is trying to address.  

Impact

Mae aims to elevate the standard of maternal health care for Black women, with a focus on improving maternal health outcomes. Believing that many of the disparities Black women face are driven by biases in care, its model prioritizes on-the-ground support from community-based doulas who are known to improve pregnancy experiences and outcomes. Mae has already begun to demonstrate improvements, and its solution is linked to reduction in maternity cost of care, improvements in health performance metrics (HEDIS metrics), and enhanced member literacy, satisfaction and engagement.  From an access perspective, at the time of investment, Mae’s enterprise users were 100% Medicaid patients, and several quantitative measures suggest that the approach is driving positive health outcomes amongst this population. Specifically, Mae has shown a 31% reduction in c-section rates and a 58% reduction in preterm birth rates amongst its users. 

While not specific to Mae, many of the tactics Mae is employing have demonstrated a direct link to an improvement in clinical outcomes. For instance: women who attend a childbirth education classes are 26% more likely to have a vaginal delivery than those who do not; women who have a birth plan are 98% more likely to have a vaginal delivery than those who do not; and, mothers who use a lactation consultant are almost 71% more likely to exclusively breastfeed within the first month of the baby’s life. Thus, with time, Mae expects to collect additional data to prove its positive impact on health outcomes.

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Our investment in Mae Health was part of a fundraising round led by Jumpstart Nova.

Why We Invested in Vacuumschmelze

By Chris Wu and Aakash Dattani

A majority of the discussion, policy, and investment in the clean energy transition has been focused on renewable energy generation, storage, mobility, financing, consumer adoption, and related challenges. The underlying supply chain and enabling infrastructure needed to support this transition, given its scale, is less well understood, and underappreciated. The growing electrification of the global energy system, both in terms of generation, and final consumption relies on a commensurate growth in the supply of highly efficient electric motors and generators. High quality magnets are an essential component of both of these electrical devices. At present, China accounts for 87% of global permanent magnet production. Consequently, the global magnet supply chain, especially after COVID, is a source of significant risk for turbine manufacturers, electric vehicle OEMs (original equipment manufacturers), and the like, especially in the western world.

Solution

Vacuumschmelze (VAC) is an advanced magnetic materials and solutions company with a 100-year operating history. The company manufactures a variety of different products that play a key role in end markets driven by the energy transition including EVs, industrial efficiency, alternative energy, and electric flight through its soft magnet and permanent magnet segments. The company currently is the only Western manufacturer of significant scale producing permanent magnets, which is a mission-critical component that goes into EV motors, so they are uniquely positioned to serve as a key supplier for this high-value segment of the global magnetic materials market.

VAC has two operating segments: Hard Magnets (permanent magnets) and Soft Magnets (Temporary Magnets). The most common type of permanent magnets VAC produces are sintered NdFeB magnets and their associated assemblies. NdFeB sintered magnets are used in EV car motors to generate propulsion (rather than an internal combustion engine) and have the highest levels of magnetism of any known magnet. VAC also serves several market segments such as wind and solar energy, advanced manufacturing, and aerospace, in which it enjoys a large market share because of the superior performance, high customization, and advanced technology characteristics of its products.

Why We Invested

Almost all of VAC’s segments have differentiated products critical to the energy transition. Key end markets within the energy transition are expected to grow at double-digit CAGRs over the next five years. VAC has longstanding secure partnerships with many blue chip customers, which tend to be sticky on account of high switching costs, and the company’s customers have consistently demonstrated strong willingness to pay. VAC’s management team has extensive industry knowledge, each member of the management team brings 15+ years of relevant industry experience. The company’s R&D pipeline - supported by a demonstrated track record - generates innovative products with attractive, durable markets and opportunities for higher margins. Western auto OEMs are projected to drive demand for an additional 25,000 tons of permanent magnets per year by 2030, which VAC is well positioned to serve. At present, there are only three players in the advanced magnetics space that can take advantage of this massive opportunity and VAC is the only producer in North America or Europe and VAC is the only one who has signed an offtake contract with a Western OEM, General Motors. VAC is in the process of building a new North American facility to supply under this contract, which is likely to meaningfully scale the company’s operations, allowing it to play a greater role in supporting the energy transition. 

Impact

The company manufactures key products that are considered foundational components that go into EV motors as well as EV charging infrastructure. OEMs desperately need these components in order to meet the transportation sector’s goal of electrifying mobility. The transportation sector accounted for 27% of the US CO2 emissions in 2020, according to the EPA. As more electric vehicles are sold they will displace polluting internal combustion engine (ICE) vehicles. The greenhouse gas emissions associated with an electric vehicle over its lifetime are typically lower than those from an average gasoline-powered vehicle, even when accounting for manufacturing and mining of rare minerals.The International Energy Agency estimates that the lifecycle GHG emissions for a mid-size EV is ~53% lower than for gasoline-powered cars. VAC’s soft magnet products, such as closed loop sensors and common mode chokes, are mission critical components that are necessary for the continued rollout of solar energy. VAC’s permanent magnets are also a core component of wind turbines, where they are used in gearbox technology for offshore wind turbines and in direct drives for onshore wind turbines. By delivering more of these products to customers, the company will enable more solar and wind energy projects to come online, which ultimately will help decarbonize the grid by displacing GHG intensive fossil fuel-based energy generation.