Fund Solutions

This Week’s Fund News: Robeco Introduces Article 9 Biodiversity Strategy

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Robeco, Morgan Stanley IM, GMPF, Impax AM, Orchard Street IM and Nuveen. 

Dutch asset manager Robeco has launched the RobecoSAM Biodiversity Equities fund. Labelled as Article 9 under the EU’s Sustainable Finance Disclosure Regulation (SFDR), the thematic investment strategy will invest in companies that benefit from the transition to a nature-positive world. These companies must demonstrate their sustainable use of natural resources and ecosystem services, as well as technologies, products and services that help to reduce biodiversity threats or restore natural habitats. Engagement will form a core part of this strategy, with the firm’s active ownership team intending to engage with up to 25% of portfolio holdings to further improve their contributions to biodiversity. David Thomas, RobecoSAM Biodiversity Equities Strategy’s Senior Portfolio Manager, said: “The potential market for new biodiversity-friendly investments by 2030 is more than US$10 trillion, according to the World Economic Forum. Protecting biodiversity is therefore not just a means of saving nature, it is also one of the largest investment opportunities of our times.” 

Morgan Stanley Investment Management has expanded its European ESG offering with two new responsible investing funds. The MS INVF Calvert Sustainable Climate Transition Fund and MS INVF Calvert Sustainable Global Green Bond Fund are two new Article 9-compliant Luxembourg-domiciled global responsible investing funds developed in partnership with Calvert Research and Management. The strategies look to deliver competitive investment results and sustainable impact across listed global equities and green bonds respectively. John Streur, Calvert’s President and CEO, said: “With Calvert’s deep understanding of material ESG analysis combined with our expanded distribution network through Morgan Stanley, we believe we are positioned to provide our clients with the most innovative, responsible investment solutions available.” 

The UK-based Greater Manchester Pension Fund (GMPF) has invested a further £10 million into the National Homelessness Property Fund 2 (NHPF2), taking the total raised to £65 million. It is the GMPF’s second investment into the fund, following its initial £10 million seed investment into NHPF2 at launch in December 2020. NHPF2 works by buying properties, refurbishing them – ensuring they are both safe and energy efficient – before leasing them to the housing sector and homelessness charities to provide individuals and families with a settled home. In Greater Manchester, the fund has partnered with Let Us, a group of five registered and ethical housing providers and will now expand to regions beyond Greater Manchester, including Oxford, Bristol and Liverpool. The fund aims to raise £300 million from institutional impact investors such as pension funds and local authorities, enabling it to acquire around 1,500 homes and to house around 7,500 people over its 15-year lifetime. Ged Cooney, GMPF’s Chair, said: “I am proud that the GMPF is continuing its support for NHPF2 by investing an additional £10 million into the fund. NHPF2 is providing a sustainable and place-based solution for economic growth in the region and beyond. I look forward to seeing the fund scale up its efforts to house more local people at risk of and experiencing homelessness.” 

London-based Impax Asset Management has launched the Impax Listed Infrastructure Fund, a UCITS-compliant product targeting listed infrastructure companies. Based on Impax’s Active Sustainable Infrastructure strategy, the Article 9 fund will invest in companies across two broad categories – resource infrastructure and social and economic infrastructure – that generate at least one-fifth of their underlying revenue by providing access to vital resources or advancing societal wellbeing. These companies will also stretch across a number of sub-sectors, including energy, water and waste management. Justin Winter, Impax’s Senior Portfolio Manager, said: “As the backbone of the modern economy, our global infrastructure assets and services must be aligned with the transition to a more sustainable economy. This new fund seeks to take advantage of this growing investment requirement and opportunity.” 

Orchard Street Investment Management, a London-based commercial property investment manager, has announced first close of its £400 million impact fund, the Orchard Street Social and Environmental Impact Partnership. The fund is focused on decarbonisation, community investment and wellness. Initial capital was raised through a Brunel Pension Partnership and Orchard Street co-investment, with just under £90 million committed at first close. Brunel Pension Partnership, one of the UK’s Local Government Pension Scheme pools, is acting as the fund’s cornerstone investor on behalf of eight of its ten underlying local authority partner funds. The fund will target value-add real estate investment opportunities with the potential to generate a measurable social and environmental impact. It will specifically focus on decarbonising existing buildings, investing in local communities and making buildings healthier. Philip Gadsden, Orchard Street’s Portfolio Director of SEIP and Managing Partner, said: “By fully integrating impact into our investment approach – with ambitious decarbonisation, wellbeing and community investment targets – the fund will accelerate the property sector’s decarbonisation, while maximising the value of buildings as a tool to promote health and community investment.” 

US-based asset manager Nuveen has launched the Nuveen Global Timberland strategy, which aims to provide investors with targeted exposure to sustainable timberland investments in key regions, including the US, Canada, Chile, Uruguay, New Zealand, and Australia. The strategy offers a natural climate solution to reduce carbon emissions by producing more timber on less land, reducing emissions through efficient operating practices and sequestering and storing carbon in soil and trees. The investments will target a net total return of 5-7% per year from the sale of timber, land sales, carbon offsets, conservation easements and natural appreciation with a targeted 2-3% per year cash yield. Martin Davies, Nuveen’s Head, said: “This strategy will offer clients access to quality timberland assets with compelling growth and sustainability central to the investment thesis. This launch is our latest step in bolstering our first-class real assets offering for clients, at a time when global investor demand is growing rapidly.” 

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