Fund Solutions

This Week’s Fund News: Northern Trust Offers ESG Bond Range

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Northern Trust, Solactive, Nuveen, KGAL, EIT InnoEnergy, Gresham House, Mirova, Fidante Partners and Aera VC. 

US-headquartered Northern Trust Asset Management (NTAM) has expanded its sustainable investment solutions offering with two global bond ESG funds and corresponding indices, built in partnership with German index provider Solactive. The NT Global Bond ESG Climate Index Fund and the NT Global 1-5 Years Bond ESG Climate Index Funds target issuers that have been identified to be effectively managing financially material ESG risks and the transition to a low-carbon economy. Both strategies utilise the same investment process but have different duration targets, providing investors with more flexibility when managing bond portfolios in a rising interest rate environment, integrating ESG scores and climate data into the government and corporate bonds within the indices. The indices include bonds issued by central governments, government-related issuers, corporates, as well as securitised debt instruments, issued by both developed and emerging markets in accordance with Solactive’s Bond Market Classification framework. Marie Dzanis, NTAM’s Head of EMEA, said: “We believe investors should be compensated for the risks they take, in all market environments, and as we see investors increasingly look to integrate sustainability characteristics into their bond portfolios, we have partnered with Solactive to offer strategies that we believe are a compelling solution to meet their needs.” 

US-based asset manager Nuveen Natural Capital has completed the acquisition of 47,751 acres in Washington and Oregon from the Green Crow Companies. The assets – the firm’s first portfolio acquisition in the US Pacific Northwest – were purchased on behalf of clients invested in Nuveen’s flagship Global Timberland Strategy, representing an opportunity for immediate, large-scale capital deployment and geographic diversification. The Nuveen Global Timberland Strategy was launched earlier this year and seeks to provide investors with targeted exposure to sustainable timberland investments in core geographies, including the US, Chile, Uruguay, Canada, New Zealand, and Australia. Chris Lipton, Nuveen Natural Capital’s Head of Timberland Investments, said: “We are incredibly pleased and excited to have sourced such a high-quality, scaled timberland asset in an off-market transaction. It clearly demonstrates our depth of relationships in the timberland market and ability to deploy capital into sought after investment geographies.” 

KGAL, a German investment management firm, and EIT InnoEnergy have partnered to invest in and drive the development of European hydrogen projects. KGAL will invest in selected hydrogen projects from the EIT InnoEnergy portfolio that have already successfully progressed through the early stages of development, with the former contributing capital and expertise in green-field investments, working together with EIT InnoEnergy to develop the projects to the point of commercial operation. Michael Ebner, KGAL Investment Management’s Managing Director of Sustainable Infrastructure, said: “An important factor for investment success is access to promising projects, which is why this cooperation is so valuable for us. With its more than 1,200 partners from industry, politics, finance, research and education, EIT InnoEnergy maintains one of the largest and most relevant ‘ecosystems’ for climate technologies worldwide.” 

The Gresham House Energy Storage Fund (GRID) has secured a £155 million funding package from UK bank NatWest. GRID is one of two publicly-listed funds dedicated to investing in utility-scale operational battery energy storage systems (BESS), expanding the UK’s storage network, which is key to driving the uptake of renewable energy sources and facilitating the UK’s transition to a low-carbon economy. Jacob Lloyd, NatWest’s Head of Specialist Asset Finance, said: “NatWest is happy to again be at the forefront of the battery market by increasing our commitment to a market leader in the BESS sector. The transition to renewables is still at the heart of NatWest’s commitment to finance green technology and being able to support this further facility for Gresham House cements this goal.” 

Global luxury group Kering and French sustainable cosmetics company L’Occitane have partnered to create the Climate Fund for Nature, which aims to mobilise resources from the luxury fashion and beauty sectors to protect and restore nature, with a particular focus on the empowerment of women. €140 million is already committed out of a €300 million target size and the fund will be open to new partner companies to support the scaling up of its positive impacts on the ground. The fund will be managed by Mirova, an affiliate of Natixis Investment Managers. Marie-Claire Daveu, Kering’s Chief Sustainability and Institutional Affairs Officer, said: “The Climate Fund for Nature provides an opportunity for the luxury fashion and beauty sectors to collectively support biodiversity restoration and conservation at scale. Kering is proud to collaborate with Mirova and we welcome the fund’s first partner.” 

Global investment management business Fidante Partners has partnered with venture capital investment manager Aera VC to expand Aera’s reach with European investors focused on climate investing. Investing at the seed stage, 80% of Aera’s portfolio is focused on climate technology, including decarbonising industries, alternative proteins and agri-systems. The remaining 20% is a special opportunities vertical focusing on climate adjacent opportunities and deep technology to advance humanity. Since its foundation in 2017, Aera has invested in 23 companies from around the globe, with more than 40% of its portfolio featuring female co-founders. Adam Brown, Fidante Partners’ General Manager and Head of Distribution, said: “The demand for technology to solve our current climate crisis is ever growing and we are excited by the opportunity to partner with Aera VC, bringing their high-quality team, expertise, and compelling investment thesis to the attention of the European investment community.” 

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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