Friday Funds: Central banking body launches Asia Pacific-focused green bond fund

The latest developments in ESG-related funds

The Bank for International Settlements is developing a new green bond fund for central banks to invest their reserves in “green projects in the Asia Pacific region”, in partnership with the Asian Development Bank and other undisclosed development financial institutions. The BIS Asian Green Bond Fund is the third central bank green bond fund created run by the Swiss-based body, which runs money for central banks all over the world. It has USD and euro-denominated funds already, and will launch the Asia-focused vehicle early next year.

JP Morgan Asset Management has launched the a US Sustainable Equity fund, the fifth fund in its UK suite of sustainable open-ended investment company strategies. The fund will invest in companies with “effective governance and superior management of environmental and social issues” and will be run by the investor’s Head of US Equity Research, David Small.

Credit Suisse and BlackRock have partnered on a private equity impact fund which will invest thematically in physical, mental and financial health. Allocation will be informed by Credit Suisse’s Supertrends research and will be aligned with selected Sustainable Development Goals, the pair said. Swiss newspaper Finews reported in February that the two firms are working together to develop a line of sustainable investment products.  

Swedish private equity house EQT is aiming to raise €4bn with the launch of its EQT Future fund, described as “an impact-driven longer-hold fund”. The fund will invest in mature companies and track three main impact KPIs: GHG emissions reduction, improved employee wellbeing and increased gender diversity. It will be supported by a new Mission Board, co-chaired by former Unilever CEO Paul Polman and Jacob Wallenberg, Chair of Swedish fund company Investor AB, which will provide strategic and impact-focused advice.

Environmental investment manager Ecofin has launched a UK version of its Global Energy Transition Fund, which invests in companies that generate at least half of their revenues from themes related to the energy transition – including clean transportation and building efficiency. The fund, which was previously only available to US investors, has returned 22.49% since its 2019 inception, compared to the MSCI ACWI’s 15.27% over the same period.    

M&G has launched two new sustainable credit strategies, serving as sustainable versions of its M&G European Credit Investment and M&G Total Return Credit Investment funds. The European credit fund will invest across the investment-grade universe and the total return fund is a flexible sustainable bond fund with the ability to invest in both investment grade and high-yield bonds, focused on developed markets. Both funds will be classified as Article 8 funds under the EU’s Sustainable Finance Disclosure Regulation.