Friday Funds: BlackRock launches fixed income impact fund

BlackRock has launched the Global Funds Impact Bond Fund, a fixed income fund in its existing Luxembourg-domiciled BGF range. The Article 9 fund will invest a minimum of 80 percent of its total assets in securities which have beneficial impacts on society or on the environment in accordance with the UN SDGs. It will also leverage proprietary impact research, which defines a bespoke investment universe and includes labelled green, social and sustainable bonds as well as impact mortgage-backed securities and impact municipal investments. Portfolio managers Russell Brownback, Ashley Schulten, Trevor Slaven, Ronald van Loon, Georgie Merson and Emily Weng will co-manage the strategy.

Alcazar Energy Partners II has reached its first close of $337 million from various investors. The strategy is targeting $500 million to invest in onshore wind and solar panels. The fund is expected to save 3.2 million tons of greenhouse gas emissions per year, generating clean energy for more than 1 million homes. AEP II has also pledged to allocate $35 million to initiatives for the communities in which they operate, including women’s empowerment, skill development and sustainability-related initiatives. Investors include the Emerging Climate Action Fund, a fund of funds launched by Allianz Global Investors and the European Investment Bank at COP26, EIB Global, the European Bank for Reconstruction and Development, the International Finance Corporation, the Asian Infrastructure Investment Bank, KfW, Agence Francaise de Developpement and FMO.

Energy Impact Partners (EIP) has closed its Deep Decarbonisation Frontier Fund I at $485 million. The early-stage climate fund surpassed its initial target of $350 million. It is primarily backed by large utility, energy and industrial companies including Microsoft Climate Innovation Fund, William Cos and Duke Energy Corporation.

The number of mutual funds and exchange-traded funds with a climate-related mandate increased by 32 percent year-on-year in the nine months to end-September, according to research from Morningstar. “All the talks at COP27 about stepping up climate finance serve as a reminder of the role investors play in the transition to a low-carbon economy,” said Hortense Bioy, global director of sustainability research at Morningstar. The study found that European climate fund assets rose by 7.5 percent from €287 billion to €309 billion. Climate-conscious funds represented 37 percent of all climate funds launched in the first nine months of 2022, followed by climate-solutions funds (31 percent) and clean energy/tech funds (17 percent).

BlueOrchard has launched a customised impact mandate for Japanese investor Daido Life Insurance of the T&D Insurance Group. The $135 million strategy invests in impact bonds which meet BlueOrchard’s impact investment criteria while also contributing to the UN SDGs. The Article 9 fund was launched in response to increasing demand for sustainable investment from Japanese investors.