Friday Funds: French regulator finds Article 9 funds exposed to fossil fuels

Seventeen French funds classified as Article 9 at end-2021, representing €16 million in assets, were invested in coal developer groups, according to research from French regulator AMF. Oil and gas developer groups were included in half of the 207 funds reviewed, representing €1.4 billion in assets. The analysis also found that Article 8 and 9 bond funds were more exposed to the coal sector than Article 6 funds, and that the differences between Article 6 and 8 funds in terms of exposure to fossil fuels were very minor.

Morgan Stanley Investment Management (MSIM) has launched two European fixed income Article 8 funds. The Short Maturity Euro Corporate Bond Fund aims to predominantly invest in short-dated investment grade corporates with maturities or call dates of less than three years. The Global Credit Opportunities Fund will look to invest across a wide spectrum of fixed income securities. Both consider issuer sustainability factors as an integral part of the research. An assessment of sustainability-related risks and opportunities are also incorporated into the investment process. The fund teams are led by Richard Ford, co-head of broad markets fixed income at MSIM.

Norges Bank Investment Management has acquired a 16.6 percent stake in He Dreiht, a 960MW wind construction project off the coast of Germany. The Norwegian trillion-dollar sovereign wealth fund will pay around €430 million for its stake. The acquisition will be made together with Allianz Capital Partners, on behalf of Allianz Insurance Companies, and AIP Management. Together, the consortium will acquire a 49.9 percent interest in the project. The agreement was signed on 22 March, with closing expected in the third quarter of 2023. He Dreiht is expected to be operational by the end of 2025 and will then be the largest offshore wind project in Germany.

HSBC Asset Management has launched a Euro ESG Liquidity fund. It builds on the manager’s Sterling ESG Liquidity and US Dollar ESG Liquidity funds – launched in October 2021 and October 2022 – which have grown to over £1.94 billion ($2.37 billion; €2.21 billion) and $735 million, respectively. The fund will invest in a portfolio of issuers that have an A1, P1 or F1 rating, or long-term equivalent.

Nuveen has launched a Global Real Estate Carbon Reduction strategy. The Article 9 fund aims to invest in real estate companies that have either achieved carbon neutrality, or have a target to, or track record of, reducing greenhouse gas emissions in alignment with the Paris Agreement. The strategy will be managed by head of public real assets Jay Rosenberg and portfolio manager and head of listed real estate investments Ben Kerl.