Fund Solutions

This Week’s Fund News: Nordea AM Develops Climate, Social Strategy

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Nordea AM, BlackRock, DWS, Sustainable Capital, CIBC AM and Russell Investments.

Nordea Asset Management (NAM) has launched a thematic strategy aimed at addressing both climate and social issues. The Global Climate and Social Impact strategy is a global equity product, classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR). The strategy takes a bottom-up approach, building on NAM’s ESG research platform and collaborating with NAM’s dedicated Responsible Investments team to engage with investee corporates on social and environmental issues. It aims to allow investors to play a more active role in the transition to a greener economy. “The climate crisis is an issue demanding our attention, yet there is also a fundamental need to address the social issues facing society today. Companies that offer solutions to these problems represent a compelling proposition for investors. New consumers care not only about what the products are made of, but how they are made. That’s why we look for companies that marry purpose and profits,” said Thomas Sørensen, Co-Manager of Nordea’s Global Climate and Social Impact strategy.

BlackRock has launched its first Systematic Multi-Strategy ESG Screened UCITS fund in Europe, which aims to offer investors alternative sources of diversification for their fixed income portfolios. Falling under Article 8 of the SFDR, the fund follows BlackRock’s pledge that 70% of its fund launches and respositionings in Europe this year will qualify as Article 8 or 9. The fund’s ESG framework will screen out exposure to corporates involved in activities such as oil sands, tobacco, controversial weapons and civilian firearms. “The ongoing macro environment of low yields and rising inflation has forced investors to re-think the role of fixed income across portfolios as the return and diversification benefits have become more challenged,” Jeff Rosenberg, Senior Portfolio Manager of the fund. Separately, BlackRock announced that it has secured more than US$250 million in commitments from institutional investors, governments and philanthropists for the Climate Finance Partnership (CFP). The flagship blended finance vehicle will invest in climate infrastructure across emerging markets.

DWS has launched the ESG Focused Infrastructure Debt Fund (EIDF). It aims to fund the alternatives and private debt space, focusing on European sustainability themed infrastructure sectors. The fund will target sectors including renewable energy, clean mobility and social infrastructure, with 30% in junior debt with a positive ESG contribution. “EIDF was launched in response to clear investor demand for infrastructure, for debt, and for sustainable products. We believe insurance companies, pension funds and investors looking for a source of duration, diversification and return premium in a low-yielding, fixed income environment will be particularly interested in this fund,” said Sundeep Vyas, Head of Infrastructure Debt, Europe, at DWS.

UK-based green bond issuance platform Sustainable Capital has launched Orestes Sustainable Income. A new ethical asset management product listed on the Frankfurt Stock Exchange, Orestes aims to deliver a ‘greenium’ to investors by investing in corporates making a positive social and environmental impact. Corporates may include sustainable mining, food security or geothermal energy production. It will incorporate an ethical sustainability programme into its asset management processes, delivering returns to investors with a focus on both liquidity and inflation-linked performance. “With a strict top-down thematic investment approach, this is not trend investing. Orestes Sustainable Income identifies companies with measurable outcomes and impacts that therefore have a long-term possibility of generating sustainable income from high-impact, ethical assets. The capital markets have a shortage of companies that make a true, positive impact; through its knowledge and experience in the market Orestes will seek to identify these to provide sustainable equity growth and long-term income stability,” said Kevin Haines, Director of Sustainable Capital.

CIBC Asset Management has bolstered its ESG offering with the launch of CIBC Sustainable Investment Solutions. This will provide investors with access to actively managed strategies that seek to align with investing values. A portion of revenue will be donated to organisations supporting climate transition activities. The products will utilise both CIBC’s ESG analysis and portfolio construction methodology as well as Sustainalytics’ customised screening. “These new solutions are a natural progression of our focus on innovative offerings that reflect the values of the clients and communities we serve. Through the associated impact donations we are pleased to support organizations focused on climate change, furthering the positive impact our clients seek,” said David Scandiffio, CIBC’s President and CEO.

Russell Investments has launched its second private markets fund. The Private Markets Fund 2021 LLC aims to offer exposure to up to 20 “best-of-breed” attractive private market segments such as technology and innovation, mainly across the US and Europe. This follows the successful closing of the Russell Investments Private Markets Fund 2019 last year, which raised US$185 million. “We see extremely attractive opportunities in multiple private markets segments, particularly around technology and innovation. We believe this second Private Markets Fund offers a compelling solution for investors seeking full access to private market investments,” said Portfolio Manager Brett Deits.

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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