Friday Funds: Apollo launches sustainable investing platform

The latest developments in ESG-related funds

Apollo Global Management has launched a sustainable investing platform to invest $100 billion in energy transition assets over the next decade. Building on the private markets momentum to finance climate change solutions, Apollo has created a platform to invest in the “decarbonisation of industry”, the firm, which manages $498 billion in assets, said in a statement. The sustainable investing group will be led by Olivia Wassenaar, who joined the firm in 2018 to co-lead Apollo’s private equity natural resources strategy. Apollo plans to “deploy record capital across our entire platform” to support the firm’s energy transition goal, Wassenaar said in the statement. 

Muzinich & Co has reclassified its global high yield fund as an Article 9 fund under the EU’s sustainable finance disclosure regulation. The fund will transition to a low carbon portfolio, targeting “high carbon efficiency” relative to the high yield universe, and will seek to transition its portfolio so that the trajectory is aligned with net zero by 2050. The strategy applies socially responsible and conduct-based exclusions criteria, and strict ESG risk management standards. 

The pension fund for Members of Parliament in the UK is targeting a 5% allocation to BlackRock’s global renewables infrastructure fund III, according to its annual report. At the end of March 2021, the £766.3mn Parliamentary Contributory Pension Fund had invested £2.6m in the fund. Over the course of 2021, it also transitioned its BlackRock-managed passively managed equity portfolio to a low-carbon alternative, while allocating £140m to a sustainable equity mandate managed by Schroders. 

Schroders has announced the launch of a new sustainable bond fund in the UK. The fund will invest in sovereign and corporate debt across emerging and developed markets, targeting countries making progress towards meeting the SDGs, those with net zero policies and “those whose political and civil freedoms are supportive of sustainable growth”. It will aim to return 2.5% over the ICE BofA Sterling three-month Government Bill index over three to five years. Schroders has also launched a UK unit trust for its European Sustainable Equity fund, which identifies companies with sector-leading sustainability profiles, as well as firms classed as “improving”. 

EQT Infrastructure has announce it is to acquire UK electric vehicle charging operator InstaVolt from founding investor Zouk Capital. EQT declined to comment on the size of the transaction, but said it planned to invest significantly to expand the firm’s rollout of rapid electric vehicle charging points across the UK. The investment was made from EQT’s Infrastructure V fund, which is now 65-70% invested. 

The European Circular Bioeconomy Fund has raised €300 million to invest in the “bio revolution” – by backing venture-stage companies producing biological and organic materials for circular economy industries. The fund closed in excess of its €250 million target, according to a press release from the fund. Further investments came from Allianz France, insurance company Volkswohl Bund; Landwirtschaftliche Rentenbank, Dutch government-backed investor Invest-NL; development bank NRW.BANK; Stellar Impact, a fund managed by Telos Impact; Nestlé; chemical companies GCV, Corbion, BÜFA and Firmenich; fuel producer Neste; the Wortmann Family Office, Dr Hans-Riegel Stiftung, Dr Hettich Beteiligungen and Koehler Group family offices; and multi-family-office Bellevue Investments. 

Six of the seven new equity allocations made by UK local government pension schemes in 2021 were specifically to ESG equity, according to analysis by Pensions Expert. Among the allocations made were Derbyshire County Council pension fund increasing its allocation to global sustainable equities to 29% from 3% and the London Borough of Lewisham Pension Fund allocating its entire £850m passive equity exposure to three low-carbon funds. 

Bank of America is to invest $5m in the Agri-Business Capital Fund. The fund, managed by Bamboo Capital Partners, invests in smallholder farms and small-to-medium agribusinesses in emerging markets, with a primary focus on sub-Saharan Africa. It has so far made 20 investments in nine African countries, although Bank of America’s commitment is the first from a “corporate global financial institution”. 

UK local authority pension pool Brunel has appointed Jupiter and Mirova as additional co-managers on its £2.5bn sustainable equities portfolio. The portfolio launched with £1.2bn in assets in 2020, and Brunel appointed the two new managers due to the significant growth since then.  

Ethical investment retail platform the Big Exchange has announced it has seen a 300% growth in customers over the past year, and is to add nine new funds to its range – four from Janus Henderson, three from Triodos, and one each from EdenTree and Federated Hermes. More than £20m has now been invested via the platform.