Fund Solutions

This Week’s Fund News: EQT “Raises the Bar” with Future Impact Fund

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including EQT, Credit Suisse, BlackRock, JPM AM, DWS, Bloomberg Philanthropies and ISA. 

Swedish private equity firm EQT has strengthened its commitment to driving positive impact by launching the EQT Future Fund. The impact-driven and longer-hold fund will apply EQT’s active ownership model and accelerate the sustainable transformation of investee companies while maintaining strong risk-adjusted returns. The fund will invest in mature, high-quality companies that are having a positive impact on their sector. With a target fund size of €4 billion, the fund has adopted three key objectives when assessing a company: planet (company is safeguarding resources and protecting climate); people (company working to improve mental and physical health); and prosperity (company prioritises equality of opportunity). The EQT Future Fund will also deploy an impact acceleration plan, through which all investee companies are expected to achieve its ambitious and asset-specific KPIs. These KPIs include the reduction of greenhouse gas (GHG) emissions using science-based targets, increasing gender diversity, and improving employee wellbeing. “EQT Future is an important strategic move. Together with our science-based targets and EQT Future’s impact-driven investment thesis, we are raising the bar for EQT and all our investment strategies. By combining EQT Future with our firm-wide approach to embed positive impact into every investment, we have the best possible foundation to grasp the most exciting opportunity, and responsibility, of our time – to support businesses that can accelerate transformational change for the benefit of the environment and society at large,” said Christian Sinding, EQT CEO. The fund will be supported by the Mission Board, which will provide strategic direction and impact-focused advice. It will be co-chaired by Paul Polman, former CEO of Unilever and a current UN Sustainability Ambassador. “As Co-Chair, I will focus on the purpose and impact thesis of EQT Future’s investments and leverage my network to connect the team with the right skills and people,” said Polman.

Motivated by the effects of the Covid-19 pandemic, Credit Suisse and BlackRock have partnered to launch the Health and Wellbeing Fund. “Credit Suisse and BlackRock have shown their mutual commitment to impact investing by providing innovative financial solutions to global societal issues,” said Lydie Hudson, CEO of Sustainability, Research and Investment Products at Credit Suisse. “This joint private market investing programme leverages the scale, expertise and strength of both firms to deliver a strong investment experience and outcomes for clients. We are delighted to work with BlackRock, with its proven private equity expertise, to provide clients the opportunity to invest with purpose.” The fund will target four sub-themes that also align with the UN Sustainable Development Goals (SDGs): physical health and wellbeing; mental health and development; nutrition and resources; and financial health. “BlackRock and Credit Suisse share a fundamental belief that clients can achieve attractive financial return alongside measurable environmental and social impact. BlackRock Private Equity Partners has a long track record of identifying private companies that are delivering innovation and growth in health and wellbeing. This is the first in a series of impact initiatives that we will co-develop with Credit Suisse over the coming years,” said Mirjam Staub-Bisang, Senior Advisor to BlackRock Sustainable Investing.

JP Morgan Asset Management (JPM AM) has launched the JPM US Sustainable Equity Fund (OEIC). The fund aims to invest in deemed most sustainable by the investment team, as well as companies demonstrating strong improvements in their sustainable characteristics. Companies should be able to demonstrate strong governance and management of environmental and social issues. The portfolio construction process will be guided by JPMAM’s US equity career analysts, a team of over 20 individuals who collectively seeks to create an ‘information advantage’ through their proprietary, fundamental research that includes an in-depth sustainability survey. The fund will be managed by David Small, Director of US Equity Research and Danielle Hines, Associate Director of US Equity Research. “US Sustainable Equity seeks to meet the ongoing client demand for well-designed strategies which can step beyond ESG integration while maintaining a focus on delivering strong risk-adjusted investment performance,” said Dale Erdei, Head of UK Funds at JPM AM.

Xtrackers by DWS, the asset management arm of Deutsche Bank, has expanded its range of ETFs tracking the MSCI Select ESG Screened indices, switching them into the ESG suite. The Xtrackers MSCI World High Dividend Yield UCITS ETF has switched to become the Xtrackers MSCI World ESG Screened UCITS ETF, and the Xtrackers Russell Midcap UCITS ETF is now the Xtrackers MSCI USA ESG Screened UCITS ETF. This follows the completion last month of a programme converting nine other existing Europe equity sector Xtrackers ETFs to MSCI Select ESG Screened underlying indices, with corresponding product name changes. These Xtrackers’ will now implement MSCI’s ESG research processes and screening, filtering out ESG laggards. “This ambitious programme of switches, alongside fee cuts on certain ETFs to keep them as competitive as possible, creates an extensive range of Xtrackers ESG ETFs which we are confident will be well received by the investment community,” said Michael Mohr, Head of Passive Products at DWS.

Bloomberg Philanthropies and the International Solar Alliance (ISA) have announced a partnership to mobilise US$1 trillion in global investments for solar energy across ISA member countries. They will both work with the World Resources Institute (WRI) to develop the Solar Investment Action Agenda, which will be launched at COP26, and the Solar Investment Roadmap, which will be launched next year. Bloomberg Philanthropies, ISA and WRI will work together to ensure ISA member countries and partners agree to adopt the necessary pathways to scale up investment in solar energy by 2030. “Global energy demand is rapidly rising, especially in developing countries, and the price of solar power is rapidly falling – but there is not enough of it being deployed. Fixing that requires more collaboration across the public and private sectors, and more data to identify challenges and opportunities – and both will be central to this effort. By speeding up investment in solar power, this new partnership will help to curb the carbon emissions that are heating the planet – while also spurring economic growth, creating jobs, and reducing costs for the public,” said Michael Bloomberg, UN Secretary General’s Special Envoy for Climate Ambition and Solutions and Founder of Bloomberg and Bloomberg Philanthropies.

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

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