Fund Solutions

This Week’s Fund News: Schroders, BlueOrchard Drive Impact in Emerging Markets

ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Schroders, BlueOrchard, Berkeley Energy, CaixaBank, BlackRock, Trium Capital, Bamboo Capital Partners and the UNCDF.

Schroders has strengthened its collaboration with emerging markets impact specialist BlueOrchard and launched the Schroder ISF BlueOrchard Emerging Markets Climate Bond fund. The UCITS climate impact strategy will target positive environmental change in emerging markets, supporting the UN Sustainable Development Goals. Benefitting from BlueOrchard’s impact investment experience and Schroders’ global distribution network, the fund will invest in mainly emerging markets green bonds, financing and re-financing projects with clear environmental, green or social benefits, such as green infrastructure and renewable energy. As an impact investor, BlueOrchard is a founding signatory of the Operating Principles for Impact Management. Both BlueOrchard and Schroders are members of the Global Impact Investing Network (GIIN). “Delivering green finance for emerging markets is key to building a low carbon world of the future. Green bonds represent a powerful opportunity to pursue positive environmental change, while also earning attractive fixed income returns. Investing in these growing opportunities will not only mean investors are contributing to a lasting positive impact to climate change mitigation in markets with the fastest growth, but are also delivering robust performance for their portfolios,” said Michael Wehrle, Head of Investment Solutions at BlueOrchard.

Berkeley Energy has raised €130 million for a first close of the Africa Renewable Energy Fund II (AREF II). As a leader in the development and operation of clean energy projects across emerging markets, Berkeley Energy will implement best-in-class management of ESG considerations as AREF II delivers measurable impact by generating substantial local economic development and employment opportunities through infrastructure projects. The fund has a final target size of €300 million, and has an investor base that includes CDP, Proparco and the Sustainable Energy Fund for Africa. Berkeley Energy previously launched the Africa Renewable Energy Fund (AREF), which invested in geothermal, hydro and solar projects. “The successful first close of AREF II sends a clear sign of confidence that our hands-on, asset-first, technically orientated approach resonates with our investors and makes a material difference for the communities in which we operate. Our track record of delivering projects and strong investment returns means we are well placed to serve Sub Saharan Africa’s growing demand for clean, affordable and reliable energy,” said Luka Buljan, Managing Director of Berkeley Energy.

Spain’s CaixaBank is driving its impact investing through the planned launch of a range of sustainable investment funds and pension plans that qualify as Article 9 products under the EU’s Sustainable Finance Disclosure Regulation (SFDR). CaixaBank has formed a strategic partnership with BlackRock to push forward its impact strategy with a particular focus on equity, noting the BlackRock fundamental equity impact team’s commitment to investment with sustainable criteria as a beneficial backdrop to the launch of the SI Impact Solutions Range. “Impact investment has become one of the key drivers of the industry’s transformation towards more sustainable models. [This strategic partnership] will allow investors to generate a benefit for both the society and the environment,” said Aitor Jauregui, BlackRock’s Country Head for Spain, Portugal and Andorra.

The BUILD Fund, created in partnership between Bamboo Capital Partners and the United Nations Capital Development Fund (UNCDF), has provided US$500,000 working capital to Mwezi, a Kenyan distributor of solar products. As its inaugural investment, BUILD is supporting Mwezi’s expansion into solar productive products and solar agri-business products across Kenya and neighbouring countries such as Uganda, Rwanda and Ethiopia. “Mwezi showcases how innovative financing solutions can make a real difference to improve access to energy for rural, off-grid communities, while simultaneously creating economic opportunities and reducing environmental damage. We are delighted that BUILD has the opportunity to play a fundamental role in scaling Mwezi and fueling its expansion plans to help the company reach more people and have an even greater impact on life in rural Africa,” said Jean-Phillipe de Schrevel, Founder of Bamboo Capital Partners.

Global equity portfolio manager Raphael Pitoun will be managing a selection of Trium Capital’s sustainable funds, with a combined AUM of over US$220 million. The Trium Sustainable Innovators Global Equity Fund and Trium Sustainable Innovators North American Fund are classified as Article 8 products under SFDR, as they both promote environmental and social characteristics. Combining ongoing analysis with company engagement, the team led by Pitoun will ensure that ESG is incorporated into the entire investment process, including research, screening, monitoring and ownership, while bolstering financial performance. “Material exposure to new market opportunities related to ESG factors will play a growing role in the sustainability of business models over the long term. Within this paradigm, we believe constant innovation is key for companies to sustain their economic edge and outperform their competitors over the long term,” said Pitoun.

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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