Friday Funds: Apollo launches $4bn clean energy transition fund

The latest developments in ESG-related funds: Global sustainable fund inflows down in Q1, says Morningstar.

Apollo Global Management has launched a Clean Transition Capital (ACT) strategy to invest in companies looking to transition to clean energy. The fund will support the firm’s target to deploy $50 billion in clean energy and climate capital by 2027. Last year, the investment manager launched its sustainable investing platform to invest a total $100 billion in energy transition assets by 2030.

Global sustainable funds attracted $29 billion of net new money in Q1 this year, down from around $38 billion in Q4 last year, according to research by Morningstar. US sustainable funds saw their third quarter of outflows in a year, driven in part by macroeconomic pressures including high interest rates and inflation. “Another possible factor damping investor demand for ESG products is the growing political backlash against sustainable investing,” Morningstar added. Europe also saw significant reduction of sustainable fund launches amid regulatory uncertainty and greenwashing concerns, Morningstar said. Despite lower inflows, global sustainable fund assets continued their recovery to hit $2.74 trillion at the end of March.

Staying with Morningstar, assets in sustainable bond funds have grown 11 times over in the past decade, reaching $516 billion globally at the end of 2022. The research found that green bonds account for around two thirds of the market, with more than 100 funds currently on the market globally. Sustainability-linked bonds represent less than 10 percent of the GSS+, with transition bonds only accounting for less than 1 percent of GSS+ issuance.

The Growth Impact Fund – a social investment fund developed by Big Issue Invest and UnLtd – has made its first investment aimed at tackling the underrepresentation in the workplace of people from neurodivergent backgrounds. The fund has invested £300,000 ($374,000, €340,000) in talent platform Neuropool, which aims to get more than 10,000 neurodivergent people into employment by 2030.