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Friday Funds: UK pension fund to shift £780m to FTSE Paris-aligned benchmark

The latest developments in ESG-related funds

The Avon local government pension fund in the UK has said it plans to shift £780m from its low-carbon equity strategy into a Paris-aligned Benchmark from FTSE Russell. According to documents published last year, the existing strategy has been run since 2018 by its pension pool, Brunel, and is benchmarked against the MSCI World Low Carbon Target index. The £4.5bn scheme said it would also reduce its allocation to emerging markets, in order to focus on engagement with developed market firms. The FTSE Russell benchmark includes fossil fuel exclusions, limits the weight of the banking sector and “rewards companies that generate green revenues” and are Paris-aligned.

NZ Super Fund has made a NZ$208m (€125m) investment into Copenhagen Infrastructure Partners’ Energy Transition Fund. The fund, which is targeting a €2.25bn raise, will focus on developing industrial-scale sustainable energy infrastructure across OECD markets in western Europe, North America and APAC. 

Kempen has raised €150m in the latest investment round of its SDG Farmland Fund, with commitments from insurance firms Coöperatie DELA and De Goudse. The fund, which invests globally in farmlands contributing towards sustainable food production, has raised €350m since inception.

UBS clients have committed $650m to MPM Capital’s new biotechnology impact fund, the bank has said. The Oncology Impact Fund 2, which has raised a total of $850m will invest up to 80% of its capital into privately held start-ups developing new treatments for cancer and other serious illnesses.  

French sustainable investment house Mirova has launched an Open Ended Investment Company version of its €4bn global sustainable equity SICAV, for UK investors. The fund will invest in companies with activities related to sustainable investment themes. It will have 40-60 holdings and claims to be aligned with a 2℃ scenario.

Meanwhile, Mirova also collaborated with 3i Group and Banque des Territoires to invest a combined €80m into NEoT Green Mobility, to fund its project pipeline. At the same time, Mitsubishi Corporation has announced its exit from the company, which offers zero-emission transport leasing and services to public authorities and transport operators, with plans to expand into hydrogen.

Ares Management has acquired a majority stake in US renewables firm Apex Clean Energy. The terms of the deal were not disclosed, but Ares said that a consortium of co-investors including Varma, EGCO Group and Korean venture capital firm IMM Investment had participated in the transaction through its funds.