Fund Solutions

This Week’s Fund News: JP Morgan Launches Climate Solutions ETF 

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including JPMAM, Pictet AM, UK Investment Bank and LGT Capital Partners.  

JP Morgan Asset Management (JPMAM) has announced the launch of two new ETFs, expanding its active ETF line-up. The two new ETFs are the JPMorgan Climate Change Solutions (T3MP) and JPMorgan UK Equity Core (JUKE) UCITS ETFs. The T3MP ETF will be JPMAM’s first Article 9 compliant UCITS ETF, using a propriety investment strategy investing in companies that are developing and scaling solutions to address climate change. This includes companies that are producing clean energy; improving the electric grid; investing in less carbon-intensive forms of agriculture, construction, or transportation; or developing technologies to reduce waste. T3MP will use the firm’s artificial intelligence technology called Themebot to screen nearly 13,000 stocks globally, identifying companies that are acting on climate change. It will be managed by Francesco Conte, Yazann Romahi and Sara Bellenda and at launch it will have 50-120 holdings and a TER of 55 basis points. JUKE, the industry’s first active UK equities UCITS ETF, aims to outperform the UK stock market by implementing a proprietary investment strategy. The investment targets delivering incremental excess returns adding up over time by taking small overweight positions in businesses deemed to be quality, have good value for money and a promising outlook by the JPM AM team. JUKE will be managed by James Illsley, Callum Abbot, Zach Chadwick and Christopher Llewelyn, and charges a TER of 25 basis points for both accumulating and distributing share classes. Oliver Paquier, JPMAM’s Head of ETF Distribution in EMEA, said: We are excited to help address our clients’ needs through the launch of T3MP, offering the best of JPMAM’s active management capabilities combining for the first time artificial and human intelligence in an ETF […] JUKE now offers investors a low active risk approach on UK equities, easily accessible in an ETF format for the first time.”  

Pictet Asset Management (PAM), a Swiss-based asset and fund manager with US$262 billion under management, has announced the launch of the Pictet-Positive Change fund. The UCITS-compliant Article 8 fund targets investment from investors looking to benefit from companies transitioning to the sustainable future economy. It aims to identify companies with a strong product and services alignment with UN Sustainable Development Goals (SDGs), those attempting to improve their alignment and those with potential to improve their SDG-alignment following targeted engagement by the PAM investment team. The investment team will use a natural language processing tool to assess the alignment of a company’s products and services with the SDG’s and use the conclusions of a comprehensive database of academic research to look at positive and negative alignments for every SDG. Evgenia Molotova, Co-lead Manager of the Pictet-Positive Change fund, said: “Our aim is to create a concentrated portfolio of financially robust companies that are aligning with global efforts to achieve sustainability goals and that will outperform the broader market.”  

The UK Infrastructure Bank (UKIB) has published its first strategic plan, which includes a £23 billion investment in clean energy and additional investments in transport, digital, water and waste. The government-owned bank intends to invest in four key areas of clean energy: power, greenhouse gas removals, heat and buildings and hydrogen, fuel supply and industry. The bank’s investment in power aims to finance the transition of mature renewable technologies to subsidy-free business models. It will also support the deployment of new renewable power generation, such as floating offshore wind, aiming to lower costs and increase scale and the flexibility and storage technologies, such as battery solutions. UKIB plans to finance new green technologies, particularly low-carbon hydrogen and carbon capture and storage (CCUS), as well as the deployment of retrofit, energy efficiency and heat technologies. The electrification of transport, roll-out of gigabit capable broadband and financing new and retrofitted energy from waste plants that include CCUS or significant heat offtake projects are some of UKIB’s transport, digital, water and waste investment plans. John Flint, UKIB’s CEO, said: “We want to lead the market in tackling specific infrastructure challenges. We are still considering which challenges we will look at first – options under consideration include financing the roll-out of electric vehicle charging points, the retrofit of buildings, the scale up of storage technologies or new net zero technologies such as low-carbon hydrogen and CCUS.”  

Swiss-based LGT Capital Partners (LGT CP) has announced the final closing of its social-focused Crown Asia-Pacific Private Equity V (CAPE V) at a US$1.65 billion hard cap. CAPE V is LGT CP’s fifth private equity investment programme investing in the Asia-Pacific region and is at the hard cap of US$1.65 billion, above the US$1 billion target fund size. Ivan Vercoutè, a LGT CP Managing Partner, said: “With CAPE V, we are making investments that are benefiting from the continued improvement in household incomes across emerging Asia while also offering investors balanced exposure to the more mature private equity markets in the region. Our longstanding relationships with the best managers across Asia provide us with the quality and quantity of deal flow required to remain highly selective in our private equity co-investment and secondary businesses.” The investor base of the fund includes more than 50 institutions, comprised of insurance companies, pension funds, foundations and university endowments across Europe, the US, Canada, Australia and the Middle East.  

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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