ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Schroders, CIM, Investec, WisdomTree, Gresham House, Hartree Partners and Generate Capital.
Schroders Capital and Civitas Investment Management (CIM) have announced the third and final closing of their Social Supported Housing Fund (SoHo), securing aggregate equity commitments of £192 million. The capital was raised from public and private pensions funds, insurance companies and charities located across the UK, US and Singapore. Prominent investors include The Church Commissioners for England and Jonathan Rose, a developer of innovative housing communities in the US, through his Lostand Foundation. “We are delighted to welcome new investors to the Fund and believe that despite the challenges associated with investors undertaking on-site due diligence during the ongoing pandemic, the considerable demand reflects the attractiveness of this asset class and its positive social impact credentials to institutional investors. CIM and Schroders are firm believers in the power of private capital to influence and deliver positive changes to society,” said Andrew Dawber, Group Director at CIM. The fund’s social impact strategy aims to contribute to the supply of newly build social supported housing for adults with physical and mental health conditions. Schroders has been investing in UK real estate for over 50 years, incorporating sustainability impacts into the firm’s strategies. CIM has committed £2.5 billion to social impact projects. “SoHo’s prime objective is creating new specialist property supply for some of the most vulnerable individuals in society and with 11 schemes already operational and another 50 in the pipeline, the fund looks set to generate genuine ‘additionality’, alongside an attractive risk-adjusted return,” said Dawber.
Investec has launched its Global Sustainable Equity (GSE) fund, which prioritises investment in companies contributing to UN Sustainable Development Goals (SDGs). With 30-50 concentrated holdings benchmarked against the MSCI World Index, the fund invests in listed global securities including equities, ETFs and regulated collective investment schemes. The fund’s impact is calculated according to the Institutional Shareholder Services (ISS) SDG Impact methodology, which provides scores determined by positive and negative contributions of revenue, operations and controversies towards the SDGs. “Through the Investec GSE Fund, investors are able to invest in companies that we believe can provide attractive investment returns over the long-term, through the lens of the SDG framework. Business practices and outputs that are aligned with the SDGs provide a net positive outcome for the planet and its people while aiming to deliver positive returns,” said Barry Shamley, Wealth and Investment Fund Manager at Investec.
ETF specialist WisdomTree has launched the Emerging Markets ex-State-Owned Enterprises ETF (XSOE), which will be listed on the London Stock Exchange, Börse Xetra and Borsa Italiana. Using the WisdomTree Emerging Markets ex-State-Owned Enterprises ESG Screened index, the ETF will track the performance of emerging market stocks in which the government owns less than 20% of outstanding shares. The index also excludes companies involved in tobacco, thermal coal activities or that are in breach of the United Nations Global Compact (UNGC) guidelines. “Over time, government influence on SOEs can lead to quite large but fairly inefficient businesses. This influence can stagnate the long-term growth potential of these companies in their respective emerging markets (EM) economies. A large portion of existing emerging market indices are made up of SOEs increasing the risk investors are taking with their EM exposure. SOEs tend to be found in the old economy sectors and are generally less dynamic and innovative than companies in thriving new economy sectors. We anticipate EM growth to come from the innovative corners of the market and companies displaying strong fundamentals – two areas non-SOEs in emerging markets have a clear advantage,” said Aneeka Gupta, Director of Research at WisdomTree.
Specialist alternative asset manager Gresham House’s Forest Growth and Sustainability fund has held its first close with £127 million in subscriptions, exceeding its £100 million target. A second close for the strategy is expected later this year. Launched in June, the fund aims to deliver sustainable capital growth by providing exposure to existing income-generating forestry in the UK and creating new productive woodland that will provide carbon credits. “This flexible strategy allows investors to choose to use the carbon credits generated for offsetting purposes or sell the units to generate income. As investors increasingly focus on sustainable investments, forestry is emerging as one of the most impactful solutions, which combats climate change and enhances biodiversity, while also serving as an excellent investment diversifier and producing meaningful uncorrelated returns,” said Olly Hughes, Managing Director of Forestry for Gresham House.
Hartree Partners and impact-driven provider of environmental services ecosecurities have partnered to launch the US$1.5 billion Project Araucaria in the Cono-Sur region of Latin America. The project will work with local farmers, landowners and NGOs to help design and finance nature-based carbon reduction and removal projects across Argentina, Chile, Paraguay and Uraguay, aiming to generate over 10 million tonnes of annual voluntary carbon credits. “Hartree’s project with ecosecurities will bring significant investment and expertise to farmers, agricultural producers and landowners across Latin America by supporting their efforts to restore habitats and ecosystems, targeting the reduction and removal of carbon in the atmosphere by over 300 million tonnes,” said Arial Perez, Partner at Hartree.
Generate Capital has made a US$240 million equity investment in Nexamp, a subsidiary of clean electricity service provider Diamond Generating Corporation (DGC), furthering DGC’s environmental sustainability efforts by diversifying its strategic portfolio in clean energy. This follows Nexamp’s US$440 million debt financing round. “Generate has extensive experience in operating and financing sustainable infrastructure. By working together with Generate we will be able to accelerate the development of innovative new solutions to make clean, resilient, and affordable energy accessible,” said Nexamp CEO, Zaid Ashai.
