ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including EQT, DWS, Unigestion, MEAG, Brown Advisory and PGIM.
Private equity firm EQT has launched its Active Core Infrastructure fund. Primarily focused on investment opportunities in Europe and North America, the fund will target core infrastructure companies providing essential services to society while contributing to the firm’s three core sustainability objectives: climate and the environment; sustainable growth and equality,;and people and society. Selected companies will be pursuing at least one of six sustainability objectives, including energy transition and decarbonisation, circular economy and resource efficiency, and equitable digital opportunities. Applying EQT’s active ownership strategy, the firm will develop tailored decarbonisation plans for each investment. “In recent years, we have seen a growing portion of attractive investment opportunities in core infrastructure companies that we have not been able to pursue with EQT’s existing infrastructure strategy,” said Lennart Blecher, Head of EQT Real Assets. “We believe EQT Active Core Infrastructure offers a unique value proposition that will further increase the relevance and importance of EQT as a partner for the fund investors, portfolio companies and the societies we operate in.” The EQT Active Core Infrastructure will have a target fund size of €5 billion.
German asset manager DWS has added two Paris-aligned benchmark ETFs to its ESG offering. The Xtrackers EMU Net Zero Pathway Paris Aligned UCITS ETF and Xtrackers World Net Zero Pathway Paris Aligned UCITS ETF both qualify as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR) and aim to reduce emissions in line with the EU’s Paris Aligned Benchmark (PAB) regulation. The underlying Solactive ISS ESG Net Zero Pathway indices provides a 50% reduction in carbon intensity versus an equivalent non-ESG market benchmark, targeting 7% year-on-year decarbonisation. DWS will further incorporate the recommendations of the Institutional Investors Group on Climate Change’s (IIGCC) Net Zero Investment Framework (NZIF), including committing to the Science Based Targets initiative (SBTi) and reporting in line with the Task Force on Climate-related Financial Disclosure (TCFD) framework. “By basing Xtrackers Net Zero Pathway ETFs on this robust, engagement-friendly indexing protocol, investors in Xtrackers ETFs can place their actions at the cutting edge of sustainable investment practices,” said Simon Klein, Global Head of Passive Sales at DWS.
Unigestion, an independent asset manager, has launched a global equity fund focused on addressing the transition to a low-carbon economy. The Unigestion Climate Transition fund falls under Article 9 of the EU’s SFDR and will be actively-managed. It will also contribute to a number of the UN’s Sustainable Development Goals (SDGs), specifically focusing on 7 (affordable and clean energy) and 13 (climate action). The fund aims to hold between 50-70 companies that are addressing climate change in line with the adaptation and mitigation activities defined in the EU Taxonomy Regulation. “Transitioning to a sustainable economy will require asset managers to deploy a huge amount of capital, presenting significant opportunities for investors, but also risks,” said Fiona Frick, Unigestion’s CEO. “These risks, such as around valuation, crowding and data accuracy, need to be rigorously managed by portfolio managers while meeting the growing demand for social alpha on top of performance.”
MEAG, the asset manager of Munich Re and ERGO, is financing projects to reduce energy consumption in the building sector through the Solas Sustainable Energy fund (SSEF). It is advised by Solas Capital. MEAG’s investment in SSEF will enable the fund to make bundled investments in comparatively small-scale sustainable energy efficiency projects that would be otherwise difficult for large institutional investors to access. Other investors include the Ireland Strategic Investment fund (ISIF) and European Investment Bank (EIB). “In the current low interest rate environment, this fund allows institutional investors to participate in an innovative and promising sector alongside Munich Re,” said Holger Kerzel, Global Head of Illiquid Assets at MEAG. “The fund contributes to achieving the EU’s climate targets.”
Brown Advisory, an independent investment firm, has unveiled its Sustainable International Leaders strategy. It will invest in an actively managed portfolio of companies outside the US that the firm considers to be ESG leaders in their sector or country. The strategy aims to outperform the FTSE All-World ex-US index while generating positive social and environmental-related impacts. Holding 25 to 35 companies in developed and emerging equity markets, the strategy will be managed by Priyanka Agnihotri. “Like all our strategies, it will be managed through a long-term lens and provide exposure to high-quality, sustainable businesses outside of the US. I view a company’s ESG risk management and sustainable business advantages as a material component of its ability to compound returns, while generating environmental and social impact,” Agnihotri said.
The global investment management business of Prudential Financial, PGIM, has launched its PGIM Strategic Income ESG fund in Singapore and Hong Kong. It is already available in the UK and across Europe. The fund is a flexible, ESG-integrated multi-sector bond strategy, covering investment grade and high-yield credit, emerging market debt, commercial mortgage-backed securities, asset-backed securities and government bonds.
