ESG Investor’s weekly round-up of news about funds designed to meet sustainable investing criteria, including Storebrand, Ossiam, BlackRock, Macquarie AM, and Phoenix Group.
Nordic sustainable investment firm Storebrand Asset Management’s new ESG Plus Emerging Markets fund aims to reduce exposure to fossil fuels in both developed and emerging markets. UK local government pension scheme (LGPS) Lewisham Pension Fund (LPF) provided the seed capital for the fund and follows LPF’s earlier investment in the AMX UCITS CCF – Storebrand – Global ESG Plus Fund, bringing total investment to over £330 million. The ESG Plus funds are equity strategies that exclude fossil fuel companies, defined as those with revenues from fossil fuels-related activities exceeding 5% of total revenue and high allocations to climate solutions and corporates with strong ESG scores. Lauren Juliff, Climate Specialist at SKAGEN Funds, a part of Storebrand Asset Management, said: “Through this partnership with LPF, Storebrand has expanded its offering for UK pension schemes and launched its award-winning, well-established climate-aware emerging markets equity strategy on the AMX platform.”
Ossiam, a Paris-based quantitative investment manager and Natixis Investment Managers affiliate, has launched the Ossiam ESG Opportunity fund. This is the firm’s first long-short equity fund and is labelled as Article 8 under the EU’s Sustainable Finance Disclosure Regulation (SFDR). It is targeting strong financial returns over the medium term with limited exposure to equity markets and an improved ESG and carbon footprint profile compared to the global equity universe. The long exposure applies two Ossiam research-based frameworks: Ossiam’s ESG machine-learning selection, which selects stocks based on ESG metrics with material impact on financial performance, and multi-factor selection, which selects stocks with overall positive exposure to traditional factors. Luc Dumontier, Ossiam Head of Investments and Operations, said: “The Ossiam ESG Opportunity fund is a natural extension of our range of quantitative systematic solutions and offers a way to balance absolute return objectives with an improved ESG profile.”
BlackRock, a US-based asset manager, has introduced the BGF Sustainable Global Allocation UCITS fund, an ESG version of the existing US$15 billion BGF Global Allocation fund. The new Article 8-compliant vehicle is incorporating a robust ESG framework throughout its investment process to meet key sustainable standards in Europe. The fund’s sustainability objectives are achieved through the use of BlackRock’s externalities framework, which evaluates and ranks underlying investments based on their positive and negative externalities. It aims to achieve a lower carbon emissions intensity score for corporate issuers owned within the portfolio, compared to that of corporate issuers of the benchmark. Rick Rieder, BlackRock’s CIO of Global Fixed Income and Head of the firm’s Global Allocation Investment Team, said: “The new fund satisfies client demand for a long-term sustainable investment approach from which, importantly, they can expect a similar risk and return profile to our legacy Global Allocation product.”
Macquarie Asset Management, an Australian financial services group, has made a €100 million debt investment in renewable energy portfolio developer Green Bidco, the controlling company of Falck Renewables. Falck Renewables is a developer, owner, and operator of renewable energy plants in Europe and the US. Its existing portfolio is comprised of 62 wind, solar, waste-to-energy, biomass, and energy storage projects, representing 1,420 megawatts of combined capacity. The company estimates its portfolio avoids approximately 550,000 tCO2e in emissions a year, equivalent to powering more than 814,000 UK households with clean energy. Alice Pulbrook, Macquarie Asset Management’s Senior Vice President, said: “With the energy transition front of mind for investors, we are very pleased to provide this financing. The investment represents a valuable opportunity for our clients to back the continued development of more sustainable, low-carbon energy solutions and technologies.”
UK-based retirements and long-term savings provider Phoenix Group has invested £111 million in science and technology developer IP Group. The financing will be used for investments in Cleantech and other sustainable assets linked to the UN SDGs. IP Group supports 400 companies, with its permanent capital structure and modest amount of debt allowing the company to commit to long-term support and capitalise on its technical and business-building expertise in high growth science and technology. Jeremy Dunton, Phoenix Asset Management’s Private Credit Senior Investment Manager, said: “This transaction further demonstrates our ability to support companies like IP Group, in developing pioneering solutions in climate action, healthcare and nano-technology which will provide us all with a better future.”