Friday Funds: UK pension fund begins hunt for ESG-savvy private equity managers

The latest developments in ESG-related funds

UK occupational pension scheme Nest is seeking growth and mid-market private equity fund managers that integrate ESG factors into their investment and asset management processes. The £20bn scheme aims to allocate 5% of its assets to private equity by the end of 2024.

71% of ‘ESG’ equity funds have a negative ‘Paris-alignment’ score, indicating that portfolio companies are not aligned to global climate targets, according to a report from InfluenceMap. More than half (58%) of the 593 equity funds assessed, which have a combined AUM of $265bn, have no holdings in fossil fuel reserves. A separate set of 130 climate-focused funds examined by the report had a combined total investment of $153m in fossil fuel production chain companies, and 72 were found to be misaligned with the Paris agreement.

BlackRock has made a A$100m (€61m) investment in Australian electric vehicle charging provider JOLT Charge, marking its entry into the sector in APAC. The investment, made by BlackRock’s Real Assets arm, will provide capital to fund up to 1,000 charging stations across the country, with plans to build up to 5,000 funded by BlackRock through the life of the business. The asset manager is reportedly also reviewing an investment in a European electric vehicle charging firm.

Schroders and Civitas Investment Management have announced the final close of a fund to finance the development of supported housing units in the UK for adults with mental and physical health conditions. The investors were not identified, but included pension funds, insurers, charitable foundations and family offices across the UK, US and Singapore, the pair said, bringing total commitments to £192m.

Impact investing platform Capshift has announced the successful close of a $5m Series A funding round. Investors in the platform, which offers access to more than 1,000 impact investment funds, include Brazen Impact, Heron Foundation and Spring Point Partners.

UK Climate Investments, a joint venture between Macquarie and the UK’s Department for Business, Energy and Industrial Strategy, has made a £25m investment to help establish the first dedicated renewables ‘yieldco’ in Africa. The initial portfolio of the yieldco, which will be managed by Revego Fund Managers, consists of six projects in South Africa with a combined capacity of 605MW. In line with the yieldco model, Revego plans to acquire further equity stakes in operational renewables projects across the country.

Late-stage ventures specialist Burda Principal Investments has made a £16m investment in UK-based sustainable food company Oddbox. Oddbox, which sells vegetables which would otherwise have gone to waste, received a £3m investment from Mercia Asset Management and Seedrs in March 2020.