ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including DWS, T. Rowe Price, WHEB, Dimensional, Summa, Verdane and Kismet.
German asset manager DWS has launched a new fund focused on ensuring gender equity alongside strong environmental and corporate governance performance. The ESG Women for Women fund is managed exclusively by women, investing in companies that have strong social values and fair working conditions for women. Companies will be assessed according to the Social Commitment Score, which evaluates them across key factors, such as gender distribution at management level and work-life balance. “The shortlist for the fund includes companies that are leaders in the Social Commitment Score as well as companies where the fund management perceives particularly strong progress,” said Katharina Seiler, one of the fund’s portfolio managers. The fund will also focus on long-term sustainable investment trends spanning education, renewable energies, infrastructure and health. “Social aspects are an increasingly important success factor for companies. They can have a positive effect on the productivity and profits of companies, which should also be reflected in a positive performance on the stock market in the long term,” said Valerie Schueler, also a portfolio manager for the fund.
US-based asset manager T. Rowe Price has strengthened its commitment to sustainability with the launch of three new funds. The UK-based OEIC Responsible UK Equity fund utilises the firm’s Responsible Investing Indicator Model (RIIM), applying a socially responsible screen to exclude companies involved in extreme ESG-related breaches without taking steps to remediate the issues. “The launch of T. Rowe Price’s first dedicated UK strategy further demonstrates our ambitions in the UK,” said John Yule, Head of UK and Ireland at T. Rowe Price. The firm has also launched two impact strategies on its OEIC platform. The Global Impact Equity fund and Global Impact Credit fund are designed to deliver positive measurable impact on the environment and society alongside long-term returns. Holding between 55-85 companies, the Global Impact Equity fund focuses on active proxy voting, building direct influence with the corporate management teams. “The investment industry has reached an exciting point where we can contribute to positive societal and environmental change, alongside a focus on financial performance,” said Hari Balkrishna, Portfolio Manager of the fund. The Global Impact Credit fund aims to target durable growing businesses with a clearly identified impact thesis. The fund won’t be limited to green bonds, instead spanning across the corporate and credit universe, including renewable energy, not-for-profit hospitals and development banks. “Driving substantive progress in the fight against climate change will require entire sectors to transition. Fixed income markets, and particularly corporate credit issuers, are playing a crucial role in addressing the world’s pressure points as they present a fertile ground of investment opportunities offering both compelling impact and performance potential,” said Matt Lawton, Portfolio Manager of the Global Impact Credit fund.
Seeded by wealth manager Rothschild & Co, WHEB Asset Management’s new Environmental Impact Fund will focus on five environmental themes, including resource efficiency, clean energy and sustainable transport. “With WHEB, we are investing in a more concentrated and focused version of their existing strategy which perfectly aligns with our environmentally focused investment strategy,” said Michel van der Spek, Co-Head of Investments at Rothschild & Co. As a more targeted version of WHEB’s global equity strategy, which also invests in social themes, the new fund is aimed at investors looking for high conviction positive environmental impact mandates. “Over recent years we have seen an increasing focus amongst asset owners on investing in line with a 1.5°C target for limiting global warming, alongside commitments to build net zero carbon portfolios. This new Environmental Impact Fund facilitates a more targeted focus on environmental and zero carbon solutions,” said George Latham, WHEB’s Managing Partner. The WHEB Environmental Impact Fund is an ICAV UCITS fund, registered for sale in the UK with registration in other countries to follow.
Dimensional Fund Advisors, a US-headquartered systematic investor, has launched the Emerging Markets Sustainability Core Equity fund and the Global Sustainability Short Fixed Income fund. The funds will be expanding the firm’s overarching sustainability investing approach across emerging and developed markets, ascertaining a meaningful reduction in exposure to companies with high CO2 emissions and potential emissions from fossil fuel reserves. Other ESG-related risks, such as tobacco, factory farming and child labour, will also be taken into consideration. “Dimensional does not rely on ESG ratings, which are often subjective and inconsistent, as the basis for its sustainable strategies. We focus instead on reducing the funds’ exposure to emissions, the most significant driver of climate change,” said Jim Whittington, Head of Responsible Investment at Dimensional. “Unlike many other ESG factors, most companies have a standard way of reporting their GHG emissions, meaning these can be more easily measured and compared.” Dimensional’s suite also includes the Global Sustainability Core Equity fund and Global Sustainability Fixed Income fund.
Summa Equity, a Nordic private equity firm, has announced the final close of €2.3 billion for its third fund (Fund III). The capital raised by a diverse group of pension funds, insurance companies, foundations and endowments will contribute to the firm’s efforts to incorporate the UN SDG framework into shaping its investment and value creation strategy to drive long-term value. The fund will focus on thematic investments in industries supported by megatrends within resource efficiency, changing demographics and tech-enabled transformation. “As we have seen in our portfolio, companies offering positive solutions for society prosper in a turbulent world,” said Reynir Indahl, Founder of Summa Equity. “With the scale up in Fund III, we hope that Summa can have significantly increase its positive impact on an international scale, investing in companies across the spectrum from young, high-growth companies to more mature firms. Impact investing, or what we call Private Equity 4.0, is becoming mainstream as a growing number of PE firms are adding to their existing capabilities the effective management of impact on ‘externalities’ to address environmental, social, and governance challenges.”
European growth equity investor Verdane has held the final close of its Verdane Idun fund. The impact-focused fund aims to invest in sustainable technology-enabled businesses across Europe. Classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR), it closed at €300 million, over its original target size of €225 million. “Today more than ever, there is a growing pool of opportunities to combine technology and sustainability, and we believe that investors like Verdane can take a leading role by supporting founders and management teams who can truly integrate sustainability into their business models and create value through impact,” said Bjarne Kveim Lie, Co-Founder of Verdane.
Kizmet Impact Capital, a Canadian impact investment fund, has launched with the intention of becoming one of the first publicly-traded impact funds by listing on the NEO Exchange. Kizmet aims to democratise impact investing by building a portfolio of purpose-driven companies and making it possible for individual investors to participate in the portfolio’s growth. “We created Kizmet to make it possible for investors who may or may not be accredited, to invest in purpose-driven companies through Kizmet, which can offer unprecedented liquidity and flexibility for those investors as well,” said CEO Dr. James Tansey. Kizmet is focused on identifying impact businesses in three key areas: food innovation that challenges conventional production by reducing environmental impacts and improving food security; impact technologies that offer scalable social and environmental benefits; and health technologies that improve outcomes through preventative measures such as dietary and behavioural changes. Kizmet uses the standards including the IRIS+ framework from the Global Impact Investing Network. All investments will also be aligned with the UN’s Sustainable Development Goals.