Responsible Funds, April 4: Pax World, FRR, LuxFLAG, Commerzbank

Pax World, the US-based sustainable investor, has launched a new fund that invests in sustainability leaders. The Pax MSCI International ESG Index Fund is a passively-managed fund that seeks investment returns corresponding to MSCI Europe Australasia Far East (EAFE) ESG Index. The fund is a merger of the Pax World International Fund and the Pax MSCI EAFE ESG Index ETF.

LuxFLAG, the Luxembourg body which labels sustainable funds, has awarded labels to three more funds. The Parvest Green Tigers fund has been granted the LuxFLAG Environment Label and the European Microfinance Platform Fund and Symbiotics (SICAV) SEB Microfinance Fund have been granted the LuxFLAG Microfinance Label. It means that 37 funds are now labeled.

Norddeutsche Landesbank (NordLB), one of Germany’s state-owned regional banks, has launched the second retail fund that tracks the Global Challenges Index (GCX), a 50-member sustainable equity index that has gained 40% since inception in 2007. The new fund is called Global Challenges Index Fonds.

Charity Bank, the UK bank which recently had a £14.5m (€17.5m) investment from Big Society Capital, is reopening its cash ISA [Individual Savings Account] for the new financial year. CEO Patrick Crawford said the bank seeks to help its borrowers to achieve greater positive social impacts.

Canada’s Arrow Capital Management has completed its deal to sell funds investing in timber, agriculture and infrastructure to Sprott Asset Management. Arrow’s Exemplar Global Infrastructure Fund, Exemplar Timber Fund and Exemplar Global Agriculture Fund are all sub-advised by Capital Innovations LLC.The Fonds de réserve pour les retraites (FRR), the €36.7bn buffer fund for France’s state pension system, has hired nine new fund managers for €900m in assets run in a combination of small- and mid-cap mandate strategies. The FRR, a founding signatory of the Principles for Responsible Investment, said Fidelity, Montanaro, Standard Life Investments and Threadneedle would split a €500m European small-cap allocation (benchmarked against the FTSE Developed Europe Small Cap index). The sector and country weights for the mandate/s will not be restricted and the contracts for managers will be drawn up for five years. Five managers, CM-CIC, CPR, Generali, ODDO and Sycomore, will run a combined €400m in French small- to mid-cap mandates. The aim is to outperform the FTSE All Cap France over three years with no limit on sector deviation. Under 2010 reforms, FRR began in 2011 to pay about €2bn per annum into CADES, the state agency charged with funding France’s social security debt. FRR, which no longer receives any asset inflows from the state, will be wound up by 2024.

Germany’s Commerzbank has teamed up with the Basel Institute of Economics to create a fund for institutional investors that will invest in “sustainable” sovereign debt from the European Union’s 28 members. The fund, known as “Commerzbank CEE Basel Sovereigns,” is in the concept phase, and the bank is hoping to attract €100m in seed money from institutions such as pension funds and insurers by the end of the year.

Cheyne Capital Management, the alternative asset manager with around $6.5bn under management, is targeting a £100m-£150m first close for its new UK Social Property Impact Fund, according to Portfolio Manager Shamez Alibhal. The fund invests in property to increase the capacity of social sector organisations, he told a seminar organised by governance firm PIRC.