Friday Funds: San Fran pension scheme shifts $500m passive allocation to active BlackRock ESG fund

The $36bn San Francisco Employees’ Retirement System (SFERS) will reallocate $500m of passive public equities, currently run through BlackRock’s Russell 1000 Value strategy, to an unnamed active ESG strategy also managed by BlackRock, under its  Systematic Active Equity Platform. The new fund seeks to outperform the Russell 1000 Value benchmark while being 30% less ‘carbon-intensive’, and is described as being aligned with SFERS’s Net-Zero-by-2050 target.

The Florida State Board of Administration, Texas’ Teachers Retirement Fund and Industriens Pension are among the backers of Actis’ fifth Energy Fund, which has reached $4.7bn at final close. The sustainable infrastructure fund will invest globally, “providing access to power in markets comprising over 80% of the world’s population”.

The Inter-American Development Bank will launch a $600m Amazon Bioeconomy Fund in partnership with the UN Green Climate Fund – the mechanism set up after the creation of the Paris Accord, to encourage wealthier nations to fund climate projects in poorer countries. GCF will contribute $279m to the vehicle, which will seek to catalyse funding for “bio-businesses that increase climate resilience and reduce emissions while keeping the Amazon forests standing” through loans, grants and equity aimed at derisking private investment.

German environmental bank Umweltbank is looking to raise an additional €4.4m from a new share issue. The subscription period ends on the 27th of October. 

BNP Paribas Asset Management has launched a new Paris-Aligned  Benchmark ETF, investing in 100 of “the leading eurozone companies in terms of reducing CO2 emissions”. Companies “actively participating in the energy transition” will make up a minimum of 5% of the index, with companies involved in ESG controversies and with poor social and governance scores excluded. 

Denmark’s P+ will become the country’s first labour-market pension fund to offer its members a dedicated sustainability option when it launches a “sustainable investment pool” in March. Kim Duus, Chair of P+’s Board of Directors, said the fund would allow savers “to choose if you as a member want an even higher level of sustainability than you already have today”. He said the fund would publish a plan for lowering the carbon footprint of its portfolio next month.

The European Circular Bioeconomy Fund has raised €200m, with increased investments from Nordrhein Westfalen Bank, Volkswohl Bund and Corbion, as well as new commitments from two undisclosed private investors. The venture capital fund, which was established in 2020 with €100m in seed funding from the European Investment Bank, invests exclusively in bioeconomy companies, which are also subject to “ambitious” ESG criteria. It is targeting a €250m raise by 2022.

UK energy company Octopus Renewables has secured a £150m investment from an undisclosed UK institutional investor into its Renewable Energy Income Partnership IV. Octopus said it will use the fund to invest in renewable assets across the UK and Europe.

Willis Towers Watson is hoping to raise $1bn for a new climate fund by the end of the year. The firm said the fund, which is open to pension schemes, will track its new World Climate Transition Index. The index, benchmarked against the iSTOXX World Index, overweights stocks deemed to be “beneficiaries” of the climate transition and underweights those expected to suffer.  

Australian Ethical has launched an actively-managed, high conviction fund for wholesale investors. Investing in a concentrated universe of between 25 and 30 mid- and large-cap public equities in Australia and New Zealand, the fund will focus on industries such as renewables, healthcare, communications and information technology.