Friday Funds: Pegasus Capital raises $130m for coral reef protection fund

The latest developments in ESG-related funds: Lombard Odier backs climate tech VC fund, DWS launches three ESG ETFs.

The Green Climate Fund has committed $125 million to a blended finance investment vehicle looking to protect coral reefs and climate vulnerable coastal communities. The Global Fund for Coral Reefs, managed by Pegasus Capital Advisors, also secured $5 million from Builder’s Vision for its first close. It is targeting a $500 million raise for an impact investment fund and $125 million for a grant fund, with proceeds going towards companies in wild-catch fisheries, aquaculture and circular economy sectors, “with the goal of creating positive benefits for coral reef ecosystems and the people who depend on them”.

Lombard Odier has invested in the $70 million first close of Systemiq Capital’s second climate tech VC fund. The fund, which is targeting $200 million, invests in scalable tech solutions across four themes: sustainable food and materials, clean transport, climate intelligence and finance and climate restoration. Other backers of the fund include the Deutsche Post Foundation and Dara Holdings.

DWS has launched two ESG ETFs investing in high-yield corporate bonds and eurozone sovereigns. The bond fund tracks a Bloomberg MSCI index that excludes corporates with a rating lower than BB from MSCI, as well as those involved in controversial weapons, fossil fuels or nuclear weapons, while the sovereign fund tracks a FTSE index that overweights sovereigns with better ESG characteristics. DWS has also launched an ESG ETF investing in Chinese equities. The ETF tracks an MSCI index that invests in the A-shares segment of the MSCI China index with a number of exclusions filters including coal and oil sands or companies in breach of the UN Global Compact. The filters result in roughly a quarter of the investment universe being screened out.

Morningstar’s index business has launched a gender equality index. The eurozone index screens out companies involved in certain products and those with inadequate ESG risk scores before selecting and weighting constituents based on gender diversity. The data for the index, provided by Equileap, covers gender equality policies, gender balance in the workforce and equal opportunities policies.

French boutique manager Atlas Responsible Investors has launched an UCITS version of its long/short equity impact strategy, which was previously only available to family offices. The fund is constructed of companies whose activities or business practices contribute to the Sustainable Development Goals, with the contribution of independent panels of sustainability experts.