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Responsible Funds, April 22: PGGM, Pax World, Church of Sweden, Nordic Investment Bank, Kames Capital

The round-up of the latest responsible funds news

Dutch pension asset manager PGGM is reportedly planning to become the first pensions provider in the country to launch an Algemeen Pensioenfonds (APF) or ‘general pension fund’. IPE quoted PGGM as saying the “non-profit co-operative” structure, called Volo, would help keep costs low. The report added APFs have so far been launched almost exclusively by insurer and that Unilever is the only firm to have set up an APF for its two pension funds.

The special meeting for shareholders of the Pax Growth Fund to approve an investment sub-advisory agreement between Pax World Management, the investment adviser to the fund, and Aperio Group, the ‘smart beta’ specialist with approximately $13.5bn in assets under management, has now been set for June 15. It’s expected the fund’s name will changed to Pax ESG Beta Quality Fund. The new offering would still invest primarily in large cap domestic companies which meet certain ESG standards. But it will “employ a strategic beta approach rather than the actively-managed approach currently used by the Fund” said CEO Joe Keefe in a filing.

The Church of Sweden has invested in microfinance as a way to find yield with traditional fixed income giving more or less zero returns, according to an interview with Treasurer and CIO Anders Thorendal in Modern Investor. “As an investor with a strong focus on sustainability, with the high conviction that there is not necessarily a trade-off between return and responsibility, there are also some interesting alternatives available in this field,” he was quoted saying. He said staying overweight in equities just because there are no attractive fixed-income alternatives could be just another way of increasing the risk “to an unhealthy level, unless you can afford to be really long-term focused”.

Financial institutions in Switzerland manage $10bn (€8.8bn) in microfinance assets and other money designed to promote development in emerging countries, a new study unveiled by Swiss Sustainable Finance (SSF) reflects. The $10bn figure represents almost one-third of all the assets earmarked for such development, the study further showed. Other key findings of the study were that 40% of the $10bn comes from Swiss institutional investors and that the money had flowed to 15 sectors, including SMEs and farming, in 96 countries. The study was compiled by the University of Zurich and Symbiotics, a Geneva-based microfinance fund provider.

The Nordic Investment Bank, which is owned by eight member countries, has allocated €500m to be invested in green bonds issued by companies or municipalities in its member countries. The investments will be used to finance projects aimed at improving the environment and mitigating climate change, in conformity with NIB’s mandate criteria. NIB intends to buy green bonds issued to finance projects that meet the Bank’s criteria for environmental investments. “We believe the green bond market can create a solid foundation for financing environmental and climate investments,” said Head of Treasury Lars Eibeholm.Kames Capital is planning to launch a new sustainable equity fund, according to reports. The Kames Global Sustainable Equity fund would be managed by Craig Bonthron and Neil Goddin, with the support of Ryan Smith, head of governance and ethical research at the UK fund firm, said Citywire. It added Kames, which has £56.8bn (€77bn) under management, would launch the Dublin-domiciled fund later this month, subject to regulatory approval. The report said the new ‘high conviction’ offering would invest in 35-45 stocks.

S&P Dow Jones Indices and RobecoSAM have launched the S&P ESG Index Series, designed to measure the performance of companies in its respective underlying index with a weighting scheme based on an ESG Factor Score. The score is derived from RobecoSAM’s annual Corporate Sustainability Assessment. It is the first index family to treat ESG as a standalone performance factor, using the RobecoSAM Smart ESG methodology, and the first global ESG index family that serves the growing market of smart beta indices.

US private equity firm TPG Capital and a fund run by Morgan Stanley Private Equity Asia are among the investors that have provided $210m (€184m) in equity finance for Janalakshmi Financial Services, a microfinance institution (MFI). Founded in 2000, Janalakshmi does business in more than 184 cities around India and has $1.65bn in assets under management. Pre-paid cash cards, pensions and loans to small businesses and individuals are among the services the MFI specialises in, a press release said.

The bill needed for the UK government to proceed with privatizing the Green Investment Bank has passed through parliament. The legislation was on Tuesday approved by the House of Lords, the upper house, which completes its passage through the parliamentary procedure. It now only needs to receive Royal Assent from the Queen. “This is an important milestone in progressing towards GIB’s capital raising, change of ownership and transfer into the private sector. That process is now underway,” GIB chair Lord Smith of Kelvin said in a statement.

The Global Challenges Index (GCX), a German sustainable equity index, shed 5.7% in the first quarter, which is better than Germany’s main equity index Dax (-7.2%) but worse than the MSCI World benchmark (-5.2%). The Hanover stock exchange, which developed the GCX together with German ESG firm Oekom Research, blamed the decline on the market volatility seen during the first quarter. The exchange also said that since its inception in September 2007, the GCX had gained 84% compared with 33% for the Dax and 61% for the MSCI World.

The UK’s inaugural £7m (€8.9m) Arts Impact Fund, developed with public, private and philanthropic investment from the Bank of America Merrill Lynch, Esmee Fairbairn Foundation, Nesta and Arts Council England with funding from the Calouste Gulbenkian Foundation has made its first social investments. A national dance agency, amateur dramatics group, and artists’ studio space will share £1m from the fund. Link