ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria.
M&G has announced that its £136 billion With-Profits Fund is allocating up to £5 billion into privately-owned sustainable enterprises. The firm said part of the long-term savings of Prudential’s 5 million UK customers will be channelled into meeting the rising global demand for capital from innovative responsible enterprises which are currently underserved by providers of institutional finance. To implement this, M&G has created a global investment team, Catalyst, which will invest in private credit, private equity and real and financial assets. “More customers are asking us to make a positive difference to the world through sustainable investment, while also seeking good financial returns to underpin their retirement. As a cornerstone investor in such enterprises, M&G can have a much greater influence in supporting their growth and on sustainability than we can in public markets,” said M&G CEO John Foley.
Lyxor Asset Management has launched a new fixed income range with three ESG corporate credit ETFs: the Lyxor ESG Euro Corporate Bond; Lyxor ESG USD Corporate Bond ; and Lyxor ESG Euro Corporate Bond Ex Financials UCITS ETFs. The range will track the Bloomberg Barclays MSCI SRI Sustainable indices and exclude corporates which generate 5% or more of their revenues from business activities related to arctic gas and oil and thermal coal. “The changes we’re making to our credit ETFs, now and in the future, allied to our world-leading green bond ETF, are designed to help them build more sustainable fixed income portfolios capable of accelerating the transition to a low carbon economy,” said Philippe Baché, Head of Fixed Income ETFs at Lyxor Asset Management.
Mirova has announced the beginning of fundraising for its Mirova Energy Transition 5 Fund (MET5), which will finance energy transition infrastructure. MET5 will offer flexibility across majority or minority stakes within equity or subordinated debt financing in the likes of solar power, hydroelectricity and biogas. The fund will further support innovative projects for further development across these sectors outside of Europe. “Renewable energy represents 20% of overall energy consumption in Europe. By 2030, this should rise to 32%. As a responsible investor, we will continue to provide greater capital to sustainable and resilient infrastructure, and to give institutional investors the opportunity to play their part in the fight against climate,” said Raphaël Lance, Head of Mirova’s Energy Transition Infrastructure Funds.
Ossiam, an affiliate of Natixis Investment Managers, has announced the launch of its Ossiam Food for Biodiversity UCITS ETF. Traded on the Xetra Exchange in Germany, the actively managed ETF aims to reduce the biodiversity footprint of the food and agriculture sector by measuring companies’ primary social contributions, food production and distribution and their overall environmental impact. “The Earth’s population is predicted to reach about 11 billion by the end of this century, but if current food production methods and diets are not drastically improved, there are likely to be calamitous environmental, social and political outcomes. Mobilising capital and engaging with companies in the board food and agriculture sectors is one way of making a positive contribution to the immense environmental challenges facing humanity now,” said Ossiam CEO Bruno Poulin.
Nordea Asset Management is soft closing its Global Climate Environment Fund, effective from February 26 2021. The fund has more than double in size in 12 months, growing by more than 500% over the course of two years to more than €6 billion. “We have been truly humbled by the trust that investors around the globe have placed in both Nordea and our Global Climate and Environment solution. Protecting our clients’ interests remains our top priority,” said Thomas Sørensen, Co-Manager of the fund.
Alquity is launching its first Global Impact Fund which will prioritise global companies committed to producing high quality products and services that have a positive sustainability, societal and environmental impact. In particular, the fund will focus on decarbonisation within its screening process, furthering the global impetus towards net-zero emissions. “We believe [the Global Impact Fund] will deliver the value created by the increasing convergence of ESG and impact data. Our investment team has laid the foundations for high quality ESG in emerging markets; now we are making use of our wider skillsets to take this approach global,” said Alquity CEO Brad Crombie.
Kingswood has launched an ESG Bond fund. The wealth manager is targeting a five-year duration, benchmarking against the Bloomberg Barclays MSCI Sterling Liquid Corporate ESG Weighted index, providing income with potential for long-term capital growth. The Kingswood ESG Bond will introduce 20% maximum weightings for any individual sector in order to ensure diversification while preserving liquidity. “We feel now is the opportune time to launch the Kingswood ESG Bond Fund which is one of the very few short-dated, actively managed, sterling-only investment grade ESG funds in the market providing very liquid, investment grade exposure to the most competitive bonds around,” said Nigel Marsh, Associate Director of Fixed Income at Kingswood.
Aberdeen Standard Investments (ASI) has partnered with The Big Issue Group to launch the Multi-Asset Climate Solutions (MACS) fund, which will invest in products and services actively helping to mitigate climate change. ASI will give 20% of any net revenue generated by the fund to The Big Issue Group to support their work for over 1,700 vulnerable and unemployed vendors making a living by selling its magazine. MACS will be managed by Head of Strategic Allocation Craig Mackenzie, Investment Manager Chris Paine and ESG Investment Manager of Multi-Asset Solutions Fiona Ritchie.