Friday Funds: PKA invests €672m in Osmosis resource efficient strategy

The latest developments in ESG-related funds: Brunel launches £155m affordable housing and renewables portfolio, LGIM launches net-zero bond fund.

Denmark’s PKA has invested DKr5 billion (€672 million; $684 million) in a resource efficient equity fund it has co-launched with Osmosis Investment Management. The fund overweights companies that are more resource-efficient, as well as excluding tobacco, leading to a relative reduction in waste of 67 percent against the MSCI World and a temperature alignment score of 1.94C against the 2.51C of the MSCI World.

Lombard Odier has launched a new food systems strategy, investing in sustainable agriculture and forestry companies. The strategy will invest in 35 to 50 companies across sustainable food production, enabling solutions including electrified farming equipment and sustainable food consumption.

Brunel Pension Partnership has launched a new local impact portfolio, investing £115 million ($138 million; €136 million) in affordable housing and renewables in the English county of Cornwall on behalf of its council pension scheme. The portfolio is composed of three mandates – a £65 million commitment to affordable housing managed by PGIM real estate and two £25 million investments in the Greencoat Renewable Income Fund and a Cornwall-focused renewables mandate, also managed by Greencoat. The portfolio is targeting a 5 percent annual return over a seven- to 10-year period and has set KPIs for environmental and social impacts.

LGIM has launched a net-zero corporate bond strategy, investing across the globe. The fund is aiming to hit 1.5C temperate alignment by 2030 and net-zero emissions by 2050, and will adopt “a progressive approach” to cutting emissions intensity as well as carrying out engagement with portfolio companies.

Investors have poured 13 billion yuan (€1.9 billion; $1.9 billion) into China’s first batch of carbon neutrality ETFs, according to reports in the South China Morning Post. The eight ETFs track the SEEE Carbon Neutrality Index, which invests in 100 listed companies in Shanghai and Shenzhen in clean energy and storage, as well as heavy polluters with “potential to cut emissions”.

Algebris Investments has raised €200 million for its first private green transition fund. A number of Italian and European investors committed to the Article 9 fund, which invests in companies across the themes of energy transition, circular economy and smart cities and agritech. Algebris is targeting a total raise of €400 million.