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Friday Funds: LGPS Central launches £1bn sustainable equities fund

The latest developments in ESG-related funds: Border to Coast launches EM equity fund, MSIM launches six article 9 funds

UK local government pension pool LGPS Central has launched a £1 billion ($1.2 billion; €1.1 billion) sustainable equity fund with investments from the Cheshire, Nottinghamshire, Shropshire and Worcestershire pension funds. The fund consists of three sub-funds covering broad, thematic and targeted investments, which will be managed by Mirova, Liontrust and Baillie Gifford respectively. LGPS Central said the fund would invest in “only the most sustainable businesses, with the expectation that it will deliver suitable return over the longer term as the world transitions to a lower-carbon economy”.

Fellow LGPS pool Border to Coast plans to launch a £1 billion emerging markets equity fund in 2023, seeking to outperform the MSCI Emerging Markets Index by 2 percent over three years. Border to Coast is looking for two emerging market equity managers to manage £650 million for the fund, with two China specialists already appointed. Managers will be assessed on integration and reporting of ESG issues, including climate change considerations, and their active engagement with companies.

Morgan Stanley Investment Management has launched six Article 9 funds, to be managed by its subsidiary Calvert Research and Management. The funds, which cover developed Europe, developed markets, US and emerging markets equities, as well as a diversity, equity and inclusion fund and a climate aligned fund, will invest in companies “with leading ESG characteristics”, MSIM said.

The Church Commissioners for England have made a €30 million commitment to the Pioneer Point Partners’ western European sustainable infrastructure fund. The fund, which closed at €575 million, will run for 10 years and focus on infrastructure investments that support the energy transition and circular economy, with two investments already made into an Irish biogas developer and Spanish renewables platform. The European Investment Fund and Texas Municipal Retirement Systems have also invested.

California-based manager Newday Impact has launched a new Ocean Health ETF which it plans to list on the New York Stock Exchange in June. At least 60 percent of the ETF’s assets will be invested in pure play companies “dedicated to protecting ocean resources”.