Deutsche replaced as asset manager of German development bank KfW’s $229m climate fund

Switzerland’s responsAbility drafted in to run fund.

Swiss microfinance specialist responsAbility is the new manager of the Global Climate Partnership Fund (GCPF), a $229m (€184.5m) fund launched in 2011 by German development bank KfW to invest in renewable energy and energy efficiency projects in emerging countries.

The GCPF, intended as a public-private partnership, had been managed since inception by Deutsche Bank’s asset management arm (DeAWM). Indeed, the German banking giant was one of the fund’s seed investors, contributing $4m.

But the GCPF’s Board, chaired by senior KfW official Monika Beck, decided earlier this year to conduct a new manager search, which responsAbility has now won. ResponsAbility’s mandate also has a length of five years.

The KfW declined further comment on why DeAWM was replaced. DeAWM itself said: “After several years of satisfactory cooperation, the KfW decided to look for a manager with a different arrangement. The KfW informed us that the decision had nothing to do with the fund’s performance.”

Also serving on GCPF’s Board are Claudia Arce, Head of South Asia for the KfW, and Ritu Kumar, a Senior Advisor on ESG matters at Actis, a private equity firm which, like responsAbility, specialises in emerging market investments. Zurich-based responsAbility has around $1.8bn invested in microfinance institutions (MFIs) in those markets.

Said Klaus Tischhauser, responsAbility’s Chief Executive: “We are committed to raising more capital for an area (renewable energy/energy efficiency) in the developing world, which, because of being underfinanced, has not been able to make much of a contribution to fighting climate change.” He added: “We are convinced of the potential of such investments and see them as a perfect compliment to our portfolio of microfinance funds.”The GCPF’s biggest investor to date has been from the public sector, namely the International Finance Corporation (IFC) with a contribution of $46.5m. Others from that sector include the German environment ministry ($41.8m), the KfW itself ($23.5m), and the Danish government ($7.7m). Austria’s Development Agency as well as the UK’s Department of Energy and Climate Change are also minor investors in the fund.

In April 2013 the GCPF won over its first private investor, the €9.7bn German doctors’ pension scheme AEVWL, which placed $30m with the fund. With the money taken in, the GCPF has invested in a dozen banks that finance renewable energy and energy efficiency projects in the emerging markets as well as in two renewables firms.

Interviewed by Responsible Investor last August, GPCF Chair Beck said that while the fund’s investors had mostly been from the public sector, private investors would now take a close look at it.

She said: “It’s all about track record. We launched the fund in 2011 and reached the break-even point at the end of 2013. This year, the fund will reach its target return (150 basis points above Euribor), so starting in 2015, we will have a good story to tell private investors.”

Link to Monika Beck interview