Responsible Funds, June 29: OPTrust, Evli Fund Management, Royal London, Jupiter, FP Lux, SUSI

The latest responsible fund developments

Canada’s OPTrust has released a Climate Change Action Plan. The plan contains eight areas to make the fund “more resilient and agile” to meet the investment challenge. Areas for action at the C$20bn (€13bn) Ontario investor include defining a clear baseline to measure the pension plan’s exposure, considering climate risk factors when assessing investments, and pushing for increased disclosure of climate change-related information from portfolio companies. “We don’t yet have the data or tools we need to determine whether, and if so to what extent, climate change poses a risk to our members’ pensions,” said President and CEO Hugh O’Reilly.

Finland’s Evli Fund Management Company has launched a new fund, Evli GLOBAL X. The vehicle, a follow up to Evli Global, will be similarly ‘value focused’, “but with increased sustainability requirements within controversial areas” like arms, alcohol, tobacco, gambling, coal, nuclear, pornography and genetically modified organisms. According to a statement, it may waive coal exclusions if companies can show they will reduce coal use going forward. The fund will be managed by Wilhelm Bruun and Marjaana Haataja.

US-based private equity house Inventiv Capital Management, whose sole mandate is to invest in projects aligned with the Sustainable Development Goals, will lend $100m to a special purpose vehicle created by Pond Technologies – a firm developing algae-based solutions for reducing carbon emissions. Pond works with cement, steel, oil & gas and utilities to lower their greenhouse gas emissions, by installing algae-based sites next to industrial plants, to capture carbon dioxide and turn it into sustainable algae bio-products like protein, fertilizer and fuel.
The African Development Bank Board will be committing $15m to the Africa Food Security Fund (AFSF) after receiving board approval. The AFSF, which targets a total capitalisation of $100m, will invest in high-growth SMEs operating in the food and agriculture segments across sub-Saharan Africa, particularly those passed over by larger private equity funds and commercial banks. The fund will be operated by Zebu Investment Partners and is anticipated to create at least 20 direct jobs for each $1m investment.

Climate financing by multilateral development banks (MDBs) was up by 28% from the previous year to $35.2bn in 2017, according to a report jointly authored by a group of MDBs. Out of the total amount, 79% or $27.9bn was allocated to climate mitigation to reduce emissions and slowing down global warming.

FP Lux Investments, a Luxembourg-based specialist investor, has announced the purchase of the Ratiperä wind farm in southwestern Finland which will grow its Wind Infrastructure I sub-fund to 19 wind farms with 94 turbines and an installed capacity of 269 megawatts in Germany, France and Finland. The fund, designed exclusively for institutional investors, is one of the largest onshore European wind funds with over €180m in capital and will continue to accept investments until Q4 2018 due to a strong project pipeline.

The SUSI Energy Storage Fund – the world’s first dedicated energy storage infrastructure fund – has reached its final closing at €252m, receiving capital commitments from institutional investors in Germany, the Netherlands, Austria, Switzerland and other European countries. Swiss investment manager SUSI Partners AG launched the fund in 2017, aiming to stabilise volatile renewable energy supply through expanding decentralised storage capacity.

The NZD38.5bn (€22.3bn) NZ Super Fund has taken a 27% stake in NZ Gourmet, the international fruit and vegetable grower and marketer, for an undisclosed price. Mark Fennell, NZ Super Fund Acting Chief Investment Officer said: “Our decision to invest in NZ Gourmet, and our confidence in its prospects, is backed by growing global demand for fresh fruit and vegetables and an increasing focus by customers on health and wellness.”The Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank, has approved a $1m (€860,000) grant to support the Republic of São Tomé & Príncipe in unlocking private investments in mini hydro power projects. The projects are intended to reduce the islands’ dependence on imported heavy oil and diesel fuel and support the government’s 2017-2021 National Development Plan, which aims to achieve at least 50% renewable energy by 2030.

Royal London has launched a range of sustainable pension funds, representing around £1.7bn (€1.9bn) in AUM and accessible to customers through their workplace and individual pension plans. To be handled by Royal London Asset Management, the five funds offer varying degrees of risk and can be invested in individually or part of a portfolio. Royal London says the funds have delivered annualised returns of between 4% and 12%.

The £40m Jupiter Green Investment Trust is to remove the existing performance fee arrangements with retrospective effect from the beginning of the current financial year. And the basis for calculating the management fee has also been cut. “These changes are intended to ensure that the Company’s charges are competitive with those for comparable investment trusts and also the institutional unit class of the Jupiter Ecology Fund which is also managed by Charlie Thomas,” the trust said.

Conservative groups Bright Blue and the Conservative Environment Network (CEN) have jointly called on the government to establish a new global nature conservation fund, with an annual allocation of £1bn (€1.13bn) from the £14bn (€15.9bn) international aid budget. Lauding the achievements of the Department for International Development (DFID) as a “world leader in poverty alleviation and humanitarian assistance”, the organisations argue that environmental causes are in equal need of sustainable development, pointing to the increasing public awareness of such issues “particularly after the huge popularity of the BBC’s Blue Planet II”.

De Pury Pictet Turrettini & Cie (PPT), a Swiss boutique investment house, has launched the Cadmos Peace Investment Fund (a UCITS fund) in collaboration with the PeaceNexus Foundation, a Swiss organisation providing strategic and technical advice to actors involved in peacebuilding. The Fund promotes peacebuilding by investing in companies active in fragile countries and using shareholder engagement to improve investee contribution to the regions they operate in. It is the latest addition to the Cadmos Engagement Funds family, which emphasises “engagement” as part of a proprietary active investment strategy. Link

The UK government has announced a £20m (€22.7m) fund to engage scientists and innovators in the fight against harmful plastic waste. The Plastics and Research Innovation Fund (PRIF) will aim to modify the UK’s plastics manufacturing and consumption patterns to establish a circular plastics economy. The fund will allocate £2m (€2.27m) for the purposes of knowledge exchange between relevant organisations, and the remaining funds to R&D.

ASA International, a prominent microfinance institute, has announced its intention to list on the main market of the London Stock Exchange next month, joining a small group of listed microfinance providers on the exchange. The organisation provides finance to low-income entrepreneurs, predominantly women, and business owners across Asia and Africa based on a proprietary microfinance model. In 2017, ASA International reported pre-tax profits of $43.4m in 2017 and has returned 25% on average equity since 2013.