Friday Funds: HSBC, DWS, CCLA, BlackRock, Morgan Stanley and more

The latest fund developments in ESG and sustainable finance

The University of Illinois System – which covers Urbana-Champaign, Chicago, and Springfield universities – has invested nearly $160m of its $720m endowment into a BlackRock ESG fund called the ESG Insight Strategy. It is the first major investor into the new fund, which reweights the Russell 3000 US Equities Index to favour “companies that rate highly on economically relevant ESG criteria”, using BlackRock’s own data.

Dutch pension giant APG and UK specialists The Renewables Infrastructure Group have bought the Merkur Offshore Wind Farm, located in the German North Sea. The pair bought the 396MW asset for an undisclosed sum from a consortium investors including InfraRed Infrastructure Fund III, which owned 25%, Partners Group, GE Energy Financial Services and ADEME.  

HSBC Global Asset Management and the IFC have raised $474m for the HSBC Real Economy Green Investment Opportunity GEM Bond Fund (REGIO) at third close. The fund focuses on emerging markets that have been hit hardest by climate change. HSBC and IFC have each committed $75m to the fund, with seven unnamed private investors also investing. More are expected to be confirmed later in the year, according to a statement.

Morgan Stanley Investment Management (MSIM) has smashed through the $1bn mark for its flagship Global Sustain strategy, which launched in 2018. The strategy, which is run by MSIM’s International Equity team, has delivered an annualised net return of 6.27% versus the MSCI World Index -4.18% since inception. Its carbon footprint is 95% lower than the MSCI World (per $1m invested) according to MSIM, and it excludes tobacco, alcohol and fossil fuels.

Union Bancaire Privée (UBP) has launched the UBAM Positive Impact Emerging Equity fund comprising 35-45 high-conviction emerging market stocks linked to SDGs for health and well-being, inclusive and fair economics, healthy ecosystems, climate stability and sustainable communities. Companies in renewables and energy storage, clean transport, life/health insurance innovation and microfinance will be included in the initial investments.

DWS has rejigged more of its existing funds to make them ESG focused. The Xtrackers Investment Grade Bond Interest Rate Hedged ETF has become the Xtrackers Bloomberg Barclays US Investment Grade Corporate ESG ETF, while the Xtrackers High Yield Corporate Bond Interest Rate Hedged ETF is now the Xtrackers JP Morgan ESG USD High Yield Corporate Bond ETF. The first has $10m under management and the second runs around $20m. DWS has repurposed mainstream funds previously, to add to its fleet of ESG products.  

The CCLA – the asset manager for UK charities, churches and local authorities – and the UK Government's Department of Business, Energy & Industrial Strategy have each put £20m into a new fund focused on boosting investment into early-stage green companies. The Clean Growth Fund, run by Clean Growth Investment Management, will target firms pioneering carbon reductions for power and energy, buildings, transport and waste. It is now fundraising in a bid to reach £100m.

FMO, the Dutch entrepreneurial development bank, has announced a collaboration with African microfinance group COFINA to provide loans to drive financial inclusion and support women- and youth-owned businesses in countries where half the population still lives below the poverty line. €7.5m will be issued to Cofina’s subsidiary in Senegal and €5m to Cofina Côte d'Ivoire. The funding will be provided by the Dutch government’s MASSIF fund, which takes early investment risk and acts as a catalyst for growth for the private financial sector.

Mirabaud Asset Management’s Global Convertible Bond Fund has bagged the French Finance Ministry’s SRI label. The label was created to enable investors to identify credible sustainability-related funds. Mirabaud plans to integrate sustainability into all its funds by the end of this year.

CapStone Holdings has launched a private venture fund for minority- and women-run businesses offering sustainable products and services. The $50m GameAbove Capital fund will focus on areas such as mobility, learning and workforce development and clean water and sanitation. 

Bain Capital Double Impact has backed Broadstep Behavioral Health, a UK-based service provider that supports people with intellectual, developmental or behavioural disabilities, in a private investment with undisclosed terms.