Responsible Funds, August 25: Austria’s Erste excludes BMW and Daimler from responsible fund range

The latest responsible funds news.

Austrian asset manager Erste has excluded BMW and Daimler from its investable sustainability universe until further notice. It said: “Due to the suspicion of a cartel agreement, both car manufacturers are therefore no longer investable for the Erste Responsible line of funds.” Erste had already excluded Volkswagen, Audi, and Porsche as a result of the diesel emissions scandal. “As pioneer and market leader, the German automotive sector bears a huge responsibility. But instead of free competition for the development of the cleanest and most efficient car, it seems backroom deals were made, geared towards stifling this very competition,” says Walter Hatak, Research Analyst and member of the sustainability team at Erste.

The Universities Superannuation Scheme, which is facing a parliamentary investigation over its £12.6bn deficit, predicts a surplus over time. CEO Bill Galvin writes on the fund’s website: “At the moment, on our best estimate for future returns, we actually have a substantial surplus but depending on the level of prudence applied to these judgements then there is a deficit to continue to manage over the long term.” He goes on: “Steering this scheme requires taking measured, balanced, collegiate decisions with a horizon of the next 20 years and beyond. While we cannot over-react to short term volatility, neither can we miss any signals about structural changes to the prospects for growth and returns.” Earlier this week, Frank Field, who chairs the House of Commons work and pensions committee, said he had written to ministers, the Pensions Regulator and USS trustees seeking to find out why the fund’s deficit has grown. Pensions consultant John Ralfe wrote in the Times that the “real solution is for USS to close the defined-benefit pension and move to pure defined contribution”. He said this would happen “sooner or later”.

Three law firms have been named co-lead counsel in what is being termed a “multi-trillion dollar” class action lawsuit accusing many US biggest banks of harming both the U.S. government and investors by rigging the $13 trillion market for securities sold by the US Treasury. The three firms that will lead the litigation are Quinn Emanuel, Cohen Milstein Sellers & Toll PLLC and Labaton Sucharow. The class action suit is being brought on behalf of pension funds and other institutional investors who are large purchasers and sellers of US Treasury Bonds.Los Angeles-based social impact investment firm Turner Impact Capital has launched a new investment initiative to address the need for community-serving healthcare facilities that can improve access to quality care, reduce costs and ultimately improve health outcomes for residents of low- and moderate-income urban communities throughout the U.S. The Turner Healthcare Facilities Fund will invest in and develop high-quality medical facilities for proven healthcare providers in communities with underserved patient populations. Initially, the fund is positioned to invest up to $100 million in facilities focused on primary care, transitional care, ambulatory care and other specialties, while generating market-rate financial returns for investors.

Grantham, Mayo, Van Otterloo & Co. (GMO) – the investment firm co-founded by Jeremy Grantham, the backer of the Grantham Institute – is set to sell its forestry and agriculture specialist investment arm, GMO Renewable Resources (GMORR), to specialised asset manager Rohatyn Group. GMO, which owns 51% of the GMORR joint venture – with GMORR’s principals owning the remaining 49%, will retain its investments in funds managed by GMORR. It is reported that the acquisition will not result in any job losses at the firm.

Listed wind farm fund Greencoat UK Wind (UKW) has acquired Corriegarth Wind Farm from Invenergy Renewables for £181m. The acquisition of the Scotland based 69.5MW windfarm was funded by UKW’s acquisition facility – which was recently increased to £400m, with refreshed tenor and lower margin. Following completion of Corriegarth UKW’s total borrowings will amount to £500m.

Sydney-based Australian Ethical has reportedly announced it has received an injection of funds from multi-manager Alpha Fund Managers — which have been invested in its flagship Australian Shares Fund. The offering focuses on Australian companies that meet the Australian Ethical Charter.

It’s been reported that Alliance, the €622m Dutch pension fund of food giant Nestlé has exited three of its in-house hedge funds., citing a new annual report, said the move was notable as its holdings were part of Ireland-based Robusta, the umbrella fund where Nestlé’s international scheme assets are pooled. The Dutch fund divested nearly €71m from three funds-of-funds managed by Robusta, the report added.