Friday Funds: Asset managers seeking €57bn for impact investment vehicles, says research

The latest fund developments in ESG and sustainable finance

Phenix Capital’s Global Impact Platform has found that €116bn has been invested into impact funds targeting developed markets. 667 vehicles with an average fund size of €171m are available, it said, and €57bn is currently being raised by asset managers across 245 impact investment vehicles with a target size higher than €80m.

Impax Asset Management has been selected to manage the NEI Global Sustainable Balanced Fund by ESG-focused Canadian asset manager Northwest & Ethical Investments (NEI), itself a subsidiary of financial services company Aviso Wealth. The C$115m (€75m) Fund – which is a balanced fixed income and equity product – will now be managed according to the Impax Leaders strategy which invests globally in 40 to 60 companies “on the cutting edge of resource optimization in areas of water, new energy, sustainable food and agriculture, and waste/resource management”.

LGT Group, a Swiss asset management and private banking group controlled by the princely family of Liechtenstein, is to spin out Lightstone – its impact investing business – in addition to its private banking and asset management arms. The three business units will now operate as independent pure play companies and the current LGT Group structure will be dissolved. Lightstone, which has a $500m (€463m) portfolio, will open its products for external investments in Q4 of this year.

Jupiter Fund Management, a UK asset manager, has opened up its Global Sustainable Equities fund for retail investors. The formerly institutionally-focused strategy, which has grown its assets by 30.42% since launch in April 2018, invests in a concentrated portfolio of companies with low carbon exposure and are aligned to the UN Social Development Goals.

African Infrastructure Investment Managers (AIIM), an affiliate of South Africa’s Old Mutual Alternative Investments, has transferred the ownership of two renewable energy projects from their flagship pan-African infrastructure fund’s (AIIF2) to AIIM’s IDEAS managed Fund, an equity fund with more than $500m invested in renewables. The exit related to a 4% stake in Cookhouse, a 139MW wind farm, and 34% stake in REISA, a 75MW solar PV facility.

Axa Investment Managers has formed a partnership with the Access to Medicine Foundation and will develop a “philanthropy mechanism” for its impact investment funds. As well as becoming the first asset manager to sponsor the body – giving it €500,000 to help prevent and respond to infectious diseases such as COVID-19 – Axa will donate 5% of impact fund management fees to charities and projects aligned with SDGs including “No Poverty”, “Good Health and Wellbeing”, “Quality Education”, “Gender Equality” and “Climate Action”.

US-based renewables specialists Windmill Capital Management has launched a private clean energy fund, and is offering up to $250m of shares to investors. The Windmill Clean Energy Credit Trust will finance loans between $5m and $10m from commercial clean energy projects in the US, across solar, cogeneration and biomass. Shares will be backed by “a specific group of loans”.

J Safra Sarasin has launched a new healthcare fund as part of its sustainable equity range. It will focus on trends such as the rise of health-conscious consumers, developments in medical technologies and the shift in demographics around health. Head of Thematic Equities, Pierin Menzli, will oversee the fund with portfolio manager Terence McManus.

ImpactAssets has launched a COVID fund with initial investment capacity of more than $1bn to respond to the pandemic and invest in areas that will promote resilience against future pandemics. The not-for-profit investment firm describes the new fund as “a hybrid of rapid-response charitable giving and flexible impact investing”, saying it will focus on “the immediate unmet needs of small businesses and individuals as well as companies fighting on the front lines of the pandemic”.

UK sustainability fund manager Resonance has completed the acquisition of four Scottish wind farms for its second wind energy fund. The £100m British Energy Income fund II made the investments for £15.6m. It is actively pursuing a further £35m of onshore wind farm investments in the UK, Resonance said.

Morgan Stanley Investment Management has launched a $110m Global Climate Impact fund, which will address pollution, depleting resources and biodiversity as well as climate change. The closed fund will be run by Morgan Stanley’s Alternative Investment Partners Private Markets arm and will have a global focus. Is it being done in collaboration with US faith investors Dominican Sisters.

European ESG investment house Ambienta has launched its first absolute return fund, which it claims is the first ever long/short fund entirely focused on environmental sustainability. The fund is aimed at institutional investors.

Domini Impact Investments has launched a new mutual fund dedicated to investments in companies that offer solutions to sustainability challenges. The fund invests globally in public companies across all sizes.