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Friday Funds: Big players enter hydrogen, energy storage and plastics

The latest developments in ESG-related funds

Osmosis Investment Management has won a $250m mandate from IMAS Foundation – the sister of the INGKA Foundation, which owns most IKEA stores in the world. Osmosis will run a Resource Efficient Core Equity Fund for the foundation. All companies involved in fossil fuel production, exploration and extraction are excluded, as are those who gain more than 5% of their revenue from fossil fuels or nuclear energy. Also excluded are companies associated with nuclear and controversial weapons, civilian firearms and tobacco. 

Impax Asset Management has been awarded a C$106m (€69m) sub-advisory mandate from FÉRIQUE Fund Management, a Canadian non-profit mutual fund company. Impax will run a new Global Sustainable Development Equity Fund using its in-house Global Opportunity Strategy, which it says “captures opportunities from the transition to a more sustainable economic model and includes a strong focus on the risks arising from the transition.”

Asset manager GAM has launched a sustainable emerging markets bond strategy, which tilts towards sovereign debt from issuers with higher ESG scores, using GAM’s in-house analysis. The firm would not provide detail on clients for the fund, but said it had already moved a “three-digit million” investment into the strategy.

Brookfield Asset Management is looking to raise $7.5bn for its new Global Transition Fund, which will invest in climate solutions, especially renewable energy, and would be among the largest climate funds to date.

Tikehau Capital has completed first close on its EU-focused Impact Lending Fund, with €100m raised from the European Investment Fund and a target size of €350m-€450m. 

Eurazeo has raised €80m for its Smart City II Fund, which invests in digital companies that support the ‘smart’ transformation of cities, including work from home innovations and the renewable energy transition.

The SIX Swiss Stock Exchange has launched ESG indices in the Swiss equity and bond market. For a company to be included in one of the 20 bond indices or two equity indices, it must secure an ESG Impact Rating of C+ and generate no more than 5% of its revenue from ‘critical’ sectors including alcohol, coal and tobacco.

Insurance and Pensions company Scottish Widows has announced a net-zero target across its fund range by 2050. The £170bn firm said it would invest heavily in renewable energy and energy-efficient technologies.

The Local Authority Pension Fund for the Welsh county of Dyfed will move 15% of its assets into low-carbon portfolios. 10% of its assets will be allocated to BlackRock’s reduced fossil fuels passive global equity strategy, and 5% to the Wales Pension Partnership global growth strategy.

Solactive, ISS ESG and Morgan Stanley have launched the Future of Plastic Index, avoiding firms with major ESG risks or ties to harmful plastic products like microbeads or single-use packaging. The index comprises the 50 highest scorers based on an assessment including use of recycled goods, efficient use of raw materials and the use of alternatives to single-use plastics.

Amundi has launched two early-stage equity funds, a European Equity ESG Improvers Fund and a Pioneer US Equity ESG Improvers fund. They will select companies showing progress on ESG matters, and actively engage with them to positively impact their financial and ESG credentials. 

Sumitomo Heavy Industries, Janus Continental Group and TSK have taken part in Highview Power’s growth capital funding round, which raised more than $70m to invest in cryogenic energy storage across Europe and the Americas.

Royal London Asset Management has announced the launch of a Global Sustainable Credit Fund. The fund launches with $125m AUM and will seek to outperform the Bloomberg Barclays Global Aggregate Corporate Total Return Index Hedged USD by 0.75% per annum over a rolling three year period.

The Macquarie Green Investment Group Renewable Energy Fund 2 has secured €1.6bn at final close. The fund already invests in an offshore wind farm and a residential rooftop solar project in the US.

JSS Sustainable Asset Management has rebadged a water fund as a ‘Green Planet’ fund. The fund, which was among the top performing funds in its Morningstar peer group in 2020, will continue its focus on ecosystem protection, while also launching new investments in the circular economy, green energy and electric vehicles.

Storebrand has announced that it now has €33bn in assets under management in its fossil free funds, an increase of €6bn since last year. This sum represents 35% of its total AUM.

Legal & General Investment Management has launched a Hydrogen Economy UCITS ETF, benchmarked against the Solactive Hydrogen Economy Index NTR. It will invest in all levels of the hydrogen production chain, including electrolyser manufacturers, fuel cell manufacturers and key industrial and utility companies.

First Sentier Investors added a Responsible Listed Infrastructure Fund to its UK range. The fund, which was launched in Ireland in 2017, invests in companies that contribute to or benefit from the Sustainable Development Goals, and carries out a detailed analysis of fund companies’ approach to ESG issues.