Friday Funds: Aviva, Singlife and UK pension schemes among investors in wave of new thematic funds

The latest developments in ESG-related funds: UK’s Clean Growth Fund reaches £100m target; Triodos launches fund for children’s development; Man Group introduces its first Article 9 fund. 

Cleantech venture investor Clean Growth Fund has raised £101 million ($133 million; €120 million) from institutional investors, among them Merseyside Pension Fund, South Yorkshire Pensions Authority, Queens’ College Cambridge and Aviva Investors. The green venture capital fund, launched in 2020 with cornerstone funding from the UK government and charity-focused investment manager CCLA, has closed its first fund to support the accelerated commercialisation of clean growth technologies. The strategy will seek to encourage more private capital into the sector by investing in the most promising early-stage UK firms focused on carbon emission reductions for power and energy, buildings, industry, transport and waste. Current investments include in smart charging, low-carbon heating, grid services, renewable energy generation and emission reductions in heavy industry.   

Triodos Investment Management has launched a thematic fund aimed at improving the wellbeing and development of children worldwide. The Triodos Future Generations Fund will invest in 30-40 listed small and mid-cap companies active across regions and sectors. It is targeting five impact themes: health and wellbeing, education, equal opportunity, access to basic services, and safety.  

Man Group has launched a fund dedicated to sustainable water and the circular economy. The manager’s first fund to identify itself as Article 9 under the EU’s Sustainable Finance Disclosure Regulation, will invest in companies that tackle water scarcity, improve the supply and treatment of high-quality water, or address the challenges of the circular economy. The long-only, active equity strategy is pegged to a number of Sustainable Development Goals. 

Foresight Capital Management has launched a Sustainable Future Themes Fund to invest in up to 40 listed companies across sustainable energy; sustainable food, land and forestry; waste, water and the circular economy; health and education; and the digital world. Only companies with more than 80 percent of revenues generated by eligible activities will be considered for the portfolio. The fund targets capital growth over a five-year period and will be available to UK-based retail and institutional investors. 

Aviva and financial services firm Singlife have co-seeded the first ‘Altrium Sustainability Fund’ from Singapore-based private equity manager Azalea Investment Management. The pair have each committed $50 million to the vehicle, which will invest in scalable solutions to address climate change, resource scarcity, healthcare, education and financial inclusion. The fund will focus primarily on buyout and growth strategies, leveraging on the strength and technical expertise of these managers to generate private equity market returns. 

Legal & General Capital has invested £8.5 million in the £15.2 million Series B round for tech businesses Rovco and Vaarst. Equinor’s venture capital arm and Foresight Group also took part in the raise for the companies, which provide subsea surveying services for offshore wind and oil field decommissioning. 

Fidelity International is to transition its £2.7 billion Moneybuilder Income fund to a sustainable-focused strategy, claiming that it will fill a gap in the market. The new strategy will require a minimum of 70 percent of the corporate bond fund to be invested in companies with an MSCI ESG rating above BBB (or BB for an emerging market company) or to receive a high rating from Fidelity’s internal ratings system, and the managers will step up their engagement with issuers. The current proportion is 86 percent, Fidelity said.