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Friday Funds: Luxembourg partners with Schroders impact subsidiary on climate strategy

The latest developments in ESG-related funds: LGT raises $550m for debut impact fund, Franklin Templeton launches China PAB.

The Luxembourg ministry of finance has partnered with Schroders’ impact investment subsidiary BlueOrchard on a strategy which aims to channel private and public investment into closing the climate finance funding gap. BlueOrchard will act as investment manager while Schroders provides AIFM services. The strategy will focus on climate mitigation and adaptation, and protection of water and biodiversity. It will operate across asset classes and emerging and developed markets, and look to invest in “solutions that address the environmental goals of the Paris Agreement and the UN SDGs”.

In other impact news, LGT Capital Partners has closed its debut impact fund with a raise of $550 million. The private equity fund raised $200 million more than its target, with investments from asset owners including endowments, pension funds and family offices across Europe, Latin America, Asia and Australia. It will invest across the themes of climate action, inclusive growth and healthcare, focusing on co-investments as well as primary and secondary fund investments, with all investments subject to an “in-depth” impact assessment, including measuring SDG alignment.

Franklin Templeton has launched a new China ETF tracking a Paris-aligned benchmark. The fund will invest in large and mid-cap equities, overweighting firms transitioning to a low-carbon economy.

Invesco has launched a corporate bond fund seeking to “contribute to the goal of achieving global net zero greenhouse gas emissions by 2050 or sooner”. The fund, which invests in investment grade issuers across the globe and is classified as Article 9 under the SFDR, bases its approach to net-zero on an investment framework set out by the Paris-Aligned Investment Initiative.

Real estate manager Empira Group has launched an Article 8 fund investing in US real estate assets. The fund, which focuses on multifamily real estate in cities in Arizona, Texas and Florida, is expected to raise $600 million at an annual return of 13.5 percent. All projects invested in by the fund will receive LEED green building certification.

Residential property firm UBM Development has been added to the VBV Austrian Sustainability Index by Wiener Börse in its latest rebalancing. The 20-member index is composed of Austrian companies “which are leaders as concerns social and environmental achievements”, with sustainability analysis provided by Austrian business consulting firm rfu.