Responsible Funds, Aug. 14: Impax, UBS, Azzad AM, WHEB, Leaf Clean Energy, Patient Capital

The round-up of the latest responsible funds news

Impax Asset Management, the UK-based sustainability investment specialist, has put together an innovative environmental impact measurement for its flagship £377m Impax Environmental Markets. The firm says IEM is the first listed equity fund to demonstrate a net positive carbon impact with a total 513,000 tonnes of carbon avoided over the past year. It estimates that for every £1m invested in IEM has delivered 700 MWh of renewable electricity generated. The methodology – developed over two years – has been assured by consulting firm EY.

Two of the US’s largest public pension funds, California’s CalPERS and CalSTRS, have reportedly lost $5.2bn (€4.7bn) on their fossil fuel investments according to an analysis from environmental campaign group 350.org cited by US media. SRI firm Trillium Asset Management did the analysis on behalf of 350.org, the reports added.

A new social investment fund sponsored by UBS wealth management has launched this week. The £5m ‘Resonance Bristol Social Investment Tax Relief (SITR) Fund’ by impact investment specialists Resonance is one of the first of its kind in the UK and enables sophisticated investors to invest in a tax efficient way in social enterprises that are helping to tackle poverty. The product will be marketed to UBS’ wealth management customers. Resonance plans to grow £30m of SITR funds in several other cities across the UK over the next 2-3 years.

Azzad Asset Management, the US-based SRI firm, says it has completed an independent, external Shari’ah audit and verification of its policies and procedures. Azzad said it is the first investment firm in the US to obtain such a verification, conducted by the UK-based Islamic Finance Advisory and Assurance Services (IFAAS), a specialist in Islamic finance. “We do not make the rules for halal investing, but we are careful to follow them,” said Azzad’s CEO Bashar Qasem.

The TriLinc Global Impact Fund says it has approved $16.6m in term loan and trade finance facilities to companies in South Africa, Zambia, Namibia, and Nigeria – bringing its total financing commitments to $86.9m. TriLinc is an impact investing fund that provides growth-stage loans and trade finance to established small and medium enterprises (SMEs) in developing economies where access to affordable capital is significantly limited.

Ireland’s €7.4bn Strategic Investment Fund (ISIF) holds more than €70m of investments in oil, coal and fracking companies, according to a report in the Irish Times. The paper, quoting research by Joseph Curtin of the Institute of International and European Affairs (IIEA) and University College Cork (UCC), and Paul Deane from UCC’s Environmental Research Institute, says the most high-profile polluter in the portfolio is TransCanada, the company behind the controversial Keystone XL project. Another investment is in Peabody Energy, the world’s largest privately owned coal company. The fund told the Irish Times the holdings were inherited from its predecessor, the National Pensions Reserve Fund.WHEB Asset Management has been appointed to manage the listed equities allocation of Ben Goldsmith’s new Menhaden Capital – representing its first separate account mandate to manage alongside the FP WHEB Sustainability Fund. It will be managed as a concentrated ‘best-ideas’ portfolio focused on solutions to sustainability challenges from within WHEB’s environmental themes. In combination with the FP WHEB Sustainability Fund, this mandate will take WHEB’s combined assets under management (AUM) in listed equities to approximately £115m, the firm said.

Leaf Clean Energy has completed the “realisations” of four of its investments. The London-listed environmental investment vehicle said they were the biomass power plants Multitrade Telogia and Multitrade Rabun Gap, the landfill gas portfolio owned by Johnstown Regional Energy, and the solar thermal power technology company SkyFuel. The up-front aggregate cash proceeds was $8.4m. The transactions were led by Leaf’s investment subsidiary, Leaf Capital Management, which comprises the investment staff at Leaf.

Star UK fund manager Neil Woodford’s new Patient Capital Trust is reportedly planning to issue new shares to satisfy investor demand. The trust could raise up to a further £80m, 10% of the current issued capital, through the new issuance, reports said.

Nearly 1,000 health professionals from across the world have signed a letter calling on UK charity the Wellcome Trust to exit fossil fuels on ethical grounds. The letter, coordinated by UK newspaper The Guardian which is spearheading a wider campaign on fossil fuel divestment, invokes one of the most famous principles of medical ethics, asking the Trust to “do no harm” because of the potential impact of climate change on global public health. Link

Norges Bank Investment Management (NBIM), manager of Norway’s (€785bn) Government Pension Fund Global (GPFG), has urged stock exchange operators to quit catering to high-frequency traders (HFTs) as this undermined the market’s functioning. According to a summary of a NBIM white paper, GPFG’s manager believes that efforts by exchanges to further accelerate data transfer speeds are “a dead end.” Instead, NBIM prefers exchanges to focus more on serving institutional investors – their biggest clients – by for example allowing for large blocks of stocks to be traded by appointment, the summary said.

Eton College, the renowned fee-paying school which has educated 19 British Prime Ministers including David Cameron, amongst many other famous names, has for the first time in its 575-year history issued a bond in a bid to admit more pupils from less privileged backgrounds and maintain its ancient buildings. It is borrowing £45m (€63.2m) through the socially-motivated bond for 45 years at a fixed interest rate of 3.63%. Rothschild was the adviser on the deal and Friends Life was the sole investor.