ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including DWS, KLP, Macquarie AM, LGIM, Universal Investment and GWM AM.
DWS Group has expanded its thematic ESG product range with a new equity fund. The DWS Concept ESG Blue Economy fund aims to primarily invest in companies having a positive impact on coastal and marine ecosystems. This includes companies that are helping to curb ocean acidification, finance sustainable fisheries or reduce marine pollution. The fund will also focus on companies positively active in the blue economy, in ocean-dependent sectors such as shipping, ports and coastal tourism. The independent conservation organisation World Wide Fund for Nature (WWF) has defined five ocean-related sectors alongside the United Nations Environment Programme Finance Initiative (UNEP FI), which the DWS Concept ESG Blue Economy has integrated into the investment process. DWS has partnered with WWF to further its previous commitment to marine conservation and set measurable sustainability targets for companies included in the fund to be compared against on a regular basis. “We invest in companies that offer solutions that can help the Blue Economy become more sustainable. However, the focus is also on companies that use the ocean as a resource and have already started to transform their business models or demonstrate their willingness to act more sustainably in the future. In addition, we enter into intensive dialogue with selected companies that have a clear negative impact on the ocean and have not yet embarked on the right path,” said Paul Buchwitz, Senior Portfolio Manager at DWS.
Norway’s largest pension company, KLP, has signed an agreement with Macquarie Asset Management and launched a platform that will invest in green infrastructure debt. The platform will invest in debt assets across hydro, solar and wind power, with KLP committing €200 million to these investments. This follows on from the 8.8 billion kroner of climate-friendly investments made by KLP in 2020. KLP has also established a framework that will enable to platform to demonstrate that its investments are contributing to its international climate goals. “We wish to substantially increase our investments in green infrastructure, in the form of long-tenor debt. We were, even after a thorough search, not able to find a solution of this type that was sufficiently green, so we had to develop it ourselves. The result is an investment strategy that is tailormade to our green requirements. It is the first time that KLP has made an investment of this kind,” said KLP CEO Aage Schaanning.
Legal and General Investment Management (LGIM) has partnered with Universal Investment and launched the UI LGIM Emerging Market Debt Absolute Return Bond fund for German investors. Actively managed by LGIM’s Emerging Market Debt investment team and integrating ESG considerations at both country and company levels, the high-conviction fund will have between 50 and 100 holdings for a medium duration between 2.5 to 4.5 years. The fund will soon be registered in Austria and Switzerland. “This fund can generate alpha returns in rising and falling market conditions thanks to a top-down macroeconomic approach. The strategy invests across all asset classes within the emerging market debt spectrum, while offering downside protection. Through its ability to invest actively across the broad investment universe, the fund can be positioned to aim to achieve better risk-adjusted returns than benchmark-constrained peers,” said Uday Patnaik, Head of Emerging Markets Debt at LGIM.
Three Japanese investor veterans have launched the inaugural MPower Partners Fund, Japan’s first ESG-focused global venture capital fund. Kathy Matsui is the former Vice Chair and Chief Equity Strategist for Goldman Sachs Japan. Yumiko Murakami also spent 20 years working for Goldman Sachs, as well as Credit Suisse, and is former Head of the OECD Tokyo Centre. Miwa Seki is the former Japanese Growth Equity Portfolio Manager for Clay Finley. With a target of capital commitments anticipated to be US$150 million, the fund aims to empower entrepreneurs by investing in tech-enabled solutions to societal challenges and companies driving sustainable growth through ESG. Currently committed limited partners include the Dai-ichi Life Insurance Company, Sompo Holdings and Sumitomo Mitsui Trust Group.
London-based GWM Asset Management has launched a merger arbitrage hedge fund strategy, with US$270 million in assets, which factors ESG into the investment process. The strategy focuses on mergers and acquisitions in Europe, excluding controversial sectors through the application of its sustainable investment criteria. Merger arbitrage hedge fund strategies have seen a resurgence this year as global Covid-19 cases decline and economies begin to re-open. GWM Asset Management’s parent company GWM Group manages €4.5 billion in assets across real estate and alternative investments.