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Fund Solutions

Redwheel Launches UK Climate Engagement Fund

Specialist independent investment manager Redwheel has unveiled its new UK Climate Engagement Fund. The Article 8 SFDR compliant fund was created by the firm’s UK Value and Income Team, and looks to deliver investment returns with an “overarching climate aim”. It also targets an income and capital return consistent with the team’s historic approach, with a key differentiator being the incorporation of an explicit climate aim pursued through active engagement, to align companies with the Paris Agreement. The strategy will combine an in-depth climate assessment framework with active engagement, investing in a concentrated, high conviction portfolio of UK stocks that seek to progress transition plans with carbon intensive companies. John Teahan will act as Lead Portfolio Manager, supported by Nick Purves and Ian Lance. Teahan told ESG Investor that responding to rising client demand due to increased awareness around climate change was a key driver behind the fund’s creation. “We think that there is a structural undervaluation of these carbon intensive companies that has come about because of hard divestment as well as soft divestment, the latter through exclusions because people have shied away from investing in such stocks, so that is a potential tailwind to the returns for our fund,” said Teahan. The strategy will be supported by the recently launched Greenwheel, Redwheel’s sustainability insights and strategy framework. “To be able to reach out to Greenwheel and to get that knowledge on climate and social issues is fantastic in supporting our engagements with companies,” added Teahan. “They bring us that research, they bring us the knowledge, the frameworks, the best practice, so it will inform us [and] help us prepare for meetings and engagements”. He noted that despite the positive outcomes the firm hopes to achieve with its engagements, it must remain “humble” as investors can only do so much, with “real change” only possible at the government level.  

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