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Responsible Funds, December 6: Phaunos Timber Fund parts company with Four Winds

The round-up of responsible funds news.

The C$30.5m SRI-themed Meritas US Equity Fund from Canada’s OceanRock Investments has a new sub-adviser. ClearBridge Investments has replaced fellow Legg Mason Global Asset Management arm Legg Mason Canada. ClearBridge has a long-term commitment to screening in the areas of environmental, social and governance (ESG), active company engagement and shareholder advocacy.

The Phaunos Timber Fund Ltd. the London-listed forestry investment vehicle, has terminated its investment management agreement with FourWinds Capital Management (FWCM) “with immediate effect”, paying US$4.2m to FWCM to do so. Phaunos has set a new subsidiary, Phaunos Boston, through which it intends to manage its assets – staffed by FourWinds’ employees. The subsidiary will initially be led by Mason Browne, formerly Director of Timber Operations at FourWinds. It has also asked Stafford Timberland to a review its assets.

Quercus Asset Selection, the renewables-focused infrastructure investor, is to buy a portfolio of 21 solar plants – totalling 254MW – for more than £300m. Once complete, the plants will form a segment of Quercus Renewable Energy Fund II, run by Quercus Assets Selection. Link

Sustainable Development Capital LLP (SDCL), the specialist financial and investment advisory firm, has launched the UK China Energy Efficiency Investments Fund, which will seek to invest up to $200m in energy efficiency projects. SDCL, which already runs the UK Energy Efficiency Investments Fund, said it would have a “cornerstone investment” from the UK Green Investment Bank.

Meanwhile, the Irish government has announced that Sustainable Development Capital is the ‘Preferred Applicant’ for the creation of a €70m Irish Energy Efficiency Fund. Subject to the finalization of terms SDCL will act as fund manager for the fund. It follows a call for Expressions of Interest in a Fund launched by the government in August.

Paris-based Cedrus Asset Management has launched the Cedrus Sustainable Equities fund of funds. Cedrus said the launch of the fund had been supported by APICIL, the French retirement and assurance group. The new fund is benchmarked against a 70% Eurostoxx 50, 30% MSCI World Euro denominated index. Cedrus AM runs more than €350m in institutional assets.Germany’s fund market has seen the roll-out of the first retail fund that mimics the Global Challenges Index (GCX), the 50-member sustainable equity index that, until now, had only been targeted to institutional investors. The advisor of the fund, known as “PRIMA Jumbo A,” is Acatis, an asset management boutique based in Frankfurt. Acatis chief executive Hendrik Leber said the GCX’s appreciation since inception in 2007 (+37%) was proof that sustainability and performance do not contradict each other. As of September 30, institutional clients had placed €129m with the GCX, which is run jointly by the Hanover bourse and German ESG research firm oekom.

Austria’s Erste Asset Management (Erste AM) has rolled out a new fund that invests in sustainable coporate bonds from emerging markets like China, India and Brazil. The fund, called “Erste Responsible Bond Emerging Corporate,” invests only in corporate debt from those markets with a sustainable rating of at least ‘B-‘ and at most ‘A’. Erste AM said it relied on sustainable ratings provided by MSCI. Corruption, genetic engineering, and manufacture of controversial weapons like cluster bombs are among the fund’s exclusion criteria. The fund starts with €25m worth of seed money and charges an annual administration fee equalling 0.96%. Erste AM is owned by Austrian savings banks and has a total of €47bn in assets under management (AuM).

STOXX, the index joint venture between by Deutsche Börse AG and Swiss exchange group, has launched a derivate of its “Global ESG Leaders Index” that, along with an emphasis on sustainability, selects stocks that pay big dividends and have a record of low volatility. STOXX’s “Global ESG Select Index,” contains 101 listed firms that have been selected from a total universe of 1800. Notable examples include Swiss food giant Néstle, Swiss drugs giant Novartis, German chemical firm BASF, Dutch food group Unilever and even Deutsche Börse. The criteria for membership in STOXX’s sustainable equity indices were developed by the German Society of Investment Professionals (DVFA) and the European Federation of Financial Analysts Societies (EFFAS). The environmental, social and governance (ESG) data for the 1800 listed firms is supplied by ESG research firm Sustainalytics. Link