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Friday Funds: Liontrust cancels ESG trust IPO plans

The latest developments in ESG-related funds

Liontrust has announced that it will not proceed with the IPO of the Liontrust ESG Trust after not attracting sufficient investor interest to meet its £100m minimum. Jon Ions, Chief Executive of Liontrust, said: “Nearly 2,000 individual private investors demonstrated their confidence in the investment proposition…. We are disappointed we won’t get the chance to repay their faith through an investment trust after everyone worked so hard to secure its launch.”  

A number of previous attempts by investors to launch such products have fallen flat or been delayed in the past. Aberdeen Standard Investments, in 2019, delayed the launch of its Global Sustainability Trust for the second time, after failing to hit its £200m target. And the People’s Trust, from high-profile investment expert Daniel Godfrey and the Impact Investment Trust failed to manage to float in 2017. Schroders, however, successfully raised £75m last year for the IPO of the first London-listed investment trust targeting positive social impact. 

Mirova has announced the final close of its Land Degradation Neutrality Fund at $208m. The fund, promoted by the UN Convention to Combat Desertification, invests in enterprises involved in sustainable land use, including agroforestry, regenerative agriculture and sustainable forestry on degraded land. It secured investments from the European Investment Bank, French development agency AFD and British and Canadian Governments, as well as 60% raised from private investors.

Gresham House Energy Storage Fund, the largest UK fund investing in battery energy storage systems, has announced plans to raise a further £100m from a new share issue.

JP Morgan Asset Management has launched its first thematic offering in the UK, the JPM Climate Change Solutions Fund. The fund will launch with between 50 and 100 holdings and invest in companies which are developing and scaling solutions to address climate change, including clean energy, sustainable transportation and low-carbon agriculture. It will use JP Morgan’s ‘ThemeBot’ tool to identify companies which are taking action on climate change.

Morgan Stanley Investment Management has announced the launch of a new UK OEIC fund, investing in a multi-asset portfolio. The Global Balanced Sustainable Fund will adopt a “multi-dimensional approach to sustainable investing with the purpose of generating positive environmental and social impacts as well as generating financial return”.

BNP Paribas Asset Management has launched a new global low carbon ETF, listed in Germany and France. The ETF will track the Low Carbon 300 World PAB index, which invests in 300 best-in-class companies, including industry leaders in reducing CO2 emissions, and is aligned with the goals of the Paris Agreement.

Sustainable Capital has launched the Orestes Sustainable Income fund, which will invest in green and sustainable bonds from high-performance companies which positively impact the environment and society, including sectors such as sustainable mining and geothermal energy. It will seek to outperform its benchmark of IBOR plus 550 basis points.

AllianceBernstein has launched a new sustainable income portfolio, which will invest exclusively in issuers contributing positively to the achievement of the SDGs. It will invest in 125 to 250 issuers across global corporate, government and securitised bond markets, and use AllianceBernstein’s ESG scoring and a proprietary methodology to determine SDG alignment. It is classified as an Article 9 fund under the EU SFDR.

Mirabaud Asset Management has launched a new Global Climate Bond fund, investing in issuers with strong commitments to emission reduction and carbon neutrality, across both green and non-green bonds. It will be benchmarked against the Barclays Global Aggregate Bond Index.

M&G has announced that its M&G Global Select and M&G Pan European Select strategies will be shifted to align their investments with the Paris Agreement. M&G proposes that eligible companies will be those with an average carbon intensity lower than 50% of the strategy’s benchmark, or companies with science-based net zero targets.