Fund Solutions

This Week’s Fund News: Managers Target Sustainable Real Assets, Infrastructure

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including LGIM, Nuveen, Mirova, Kempen Capital Management, ThomasLloyd, Robeco and UBS GWM.

Asset managers are strengthening their ability to offer exposure to sustainable property and infrastructure to institutional clients. Legal and General Investment Management (LGIM) has launched the Sustainable DC Property Fund which aims to meet growing demand from DC schemes to access real assets and incorporate ESG targets. “Real estate is central in the transition to net zero as buildings play a major role in supporting a low-carbon economy and society. The demand for real assets is growing, three quarters of our recent major investment consultant conversations in DC Distribution have emphasised demand for them. We believe that protecting and enhancing real assets against the effects of climate change will create long-term value and performance. We are adopting this positioning now to capture this performance and to help enhance the long-term financial value of real estate,” said Michael Barrie, Director of Fund Management for LGIM Real Assets. The fund will be reshaping LGIM’s existing property portfolio to include responsible investing as a core target, setting decarbonisation objectives in line with science-based evidence. It will provide exposure to a diversified portfolio of assets across sectors, with a 30% allocation to the L&G Global Real Estate Equity Index Fund. Global asset manager Nuveen has also strengthened its Real Assets platform with the launch of two new business units: Nuveen Natural Capital and Nuveen Infrastructure. The platform will consist of capabilities in real estate, farmland, infrastructure and commodities, organised under the three pillars: Natural Capital, Infrastructure and Real Estate. This follows research by Nuveen which highlighted over two-thirds of institutional investors plan to increase their allocation of capital to infrastructure, natural resources investments and other alternative assets. “Investor demand for real assets is increasing at an extraordinary pace and by bringing together our unrivalled expertise in alternatives, we will be better positioned to respond to meet growing global investor demand for long-term sustainably managed investments,” said Mike Sales, Nuveen CEO of Real Assets.

Mirova, an affiliate of Natixis Investment Managers dedicated to sustainable investing, has launched the Natixis Mirova Global Sustainable Equity fund. Managed by Jens Peers, Amber Fairbanks and Hua Cheng, it will be almost identical to the Mirova Global Sustainable Equity SICAV, which was launched in 2013. The objective is to outperform the MSCI World Net Dividends Reinvested Index, investing in companies that qualify under sustainable investment themes. It will take a multi-thematic investment approach, targeting demographic, environment, technology and governance and will further maximise exposure to companies contributing to the UN Sustainable Development Goals (SDGs). “We have seen a strong demand from investors in the UK and this OEIC will allow them to more easily access the fund and make a meaningful difference to the sustainability profile of their portfolios,” said Fairbanks. Mirova has also launched a pan-European private equity fund, the Mirova Environment Acceleration Capital Fund. With a fundraising target of €300 million, it aims to invest in companies providing sustainable innovative solutions and technologies that contribute to the transition to a low-carbon world. “Since its creation, Mirova has aimed to facilitate the transition to a sustainable economic model that meets social and environmental challenges through innovative and impactful investment solutions. It was natural for us to add to our expertise a strategy dedicated to private companies,” said Anne-Laurence Roucher, Mirova’s Deputy CEO.

Following the launch of Kempen Capital Management’s SDG Farmland Fund, in collaboration with Stichting Pensioenfonds PostNL, two insurance companies have invested in the fund. Coöperatie DELA and De Goudse contributed to the €150 million secured during a recent investment round, with the fund having raised €350 million since its foundation six months ago. “We are further diversifying our portfolio while at the same time contributing towards the achievement of our sustainability goals. What attracts us the most in the Kempen SDG Farmland Fund is that a sustainability plan is drawn up for each investment, making the sustainable goals concrete as well as creating accountability for the achievement of the goals,” said Frank Eizinga, CIO of Coöperatie DELA. The Kempen SDG Farmland Fund invests in farmlands across the globe that will drive financial returns through sustainable food production. These are measured through sustainable KPIs spanning climate, soil health, biodiversity and water quality. “Besides the returns and the ecological aspects of this fund, we feel that the social factor is very important as well. By investing in this fund, we enable young farmers to use new capital to achieve their long-term sustainability goals,” said Richard Jacobs and Edzard Potgieser, portfolio managers of the fund.

ThomasLloyd has unveiled its first European Long-term Investment Fund (ELTIF), the Sustainable Infrastructure Growth Fund. It aims to invest in decarbonisation and energy transition investments across Asia’s high growth and emerging markets, providing exposure to real assets. “The launch of our ELTIF is the first European wide investment solution that will help fund the development of clean energy technologies in Asia to support the global green transition. The ELTIF provides a platform for investors wanting to invest their long-term capital in the real economy and have positive impact on the environment and communities,” said Michael Sieg, Founder and CEO of ThomasLloyd. The ELTIF complements other investment solutions launched by the firm, including the ThomasLloyd Sustainable Infrastructure Income Fund.

Robeco has launched the RobecoSAM Global SDG Engagement Equities Fund, developed in partnership with UBS Global Wealth Management (GWM). As exclusive partner for the first six months, UBS GWM aims to invest up to US$1.5 billion in the fund. With a high conviction strategy with sustainable investment strategies and benchmarked against the MSCI All County World Index, the fund aims to invest in companies contributing to the UN SDGs and to improve such contributions through active engagement. This follows the 2018 launch of the RobecoSAM Global SDG Equities Fund. “Through this collaborative effort, we connect people to contribute to a better world – and we connect attractive investment ideas with the UN’s SDGs. We are happy to offer our clients exclusive access to this new sustainable investment solution,” said Bruno Marxer, Head of Global Investment Management at UBS GWM.

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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