Responsible Funds, August 12: Australia solar fund, American Century, Zacks, Creation, SUSI Partners

The latest responsible funds news

A new, A$100m (€68.9m) renewable energy investment fund targeting established solar farms in Australia has been launched. Melbourne-based Impact Investment Group – a certified B Corporation – said its unlisted Solar Income Fund would be headed by former Pacific Hydro chief and Clean Energy Council director Lane Crockett and focus on blue chip assets of up to 30MW. The fund is chaired by Ross Garnaut, the Australian National University professor who chaired a government-backed study of climate change in 2008. He said: “This fund aims to provide attractive and stable returns to investors with positive social and environmental benefits.” Announcement

Zacks Index Services, part of US wealth management boutique Zacks Investment Management, has launched a global water index that will serve as the basis for a new water exchange traded fund listed on the New York Stock Exchange. The Summit Zacks Global Water Index will underlie the new Summit Water Infrastructure Multifactor ETF (WTRX) from fund firm Summit Water Capital Advisors. It’s claimed the new index is the “first and only global water index with a weighting scheme based on dividend yield rather than market capitalization”. Matt Dickerson, CEO at San Diego-based Summit Water, said the index targets a more “balanced and representative” exposure to the global water industry.

Creation Investments Capital Management, the Chicago-based impact investment house, has announced the final closing of its Social Ventures Fund III with $125m from existing and new investors including US insurance companies, pension funds, foundations and family offices. The fund has already made six investments since inception in Asia, Eastern Europe and Latin America.

The European Investment Bank (EIB) has agreed with Sustainable Sàrl, a subsidiary of Swiss renewables investor SUSI Partners AG, for a commitment of up to €62m into the SUSI Renewable Energy Fund II. The investment is guaranteed under the European Fund for Strategic Investments. The portfolio of SUSI’s fund comprises 13 wind and solar farms in Germany, France, the UK, Portugal and Italy, delivering a total output of approximately 170 MW. EIB Vice-President Pim van Ballekom commented: “Renewable energy is high on the list of priorities of the European Fund for Strategic Investments, as well as for the Bank’s lending in general. We have set ourselves a target of committing at least 25% of all our lending to fighting climate change and the EIB’s participation in the SUSI RE II adds significantly to the ways in which the Bank already supports this.”Missouri-based asset manager American Century Investments has reportedly revamped one of its central products, the American Century Fundamental Equity Fund, to take account of ESG factors. Now dubbed the American Century Sustainable Equity Fund, the $229.7mn portfolio will retain a focus on long-term capital growth but will factor sustainability information into investment decision on the back of increased client demand. Since the institution, which manages around $140bn of assets, made the change to the fund, its prospectus now includes the specific ESG criteria risks which can occur if the fund’s managers choose to exclude certain stocks.

BlackRock Real Assets has reportedly completed the final close for its Renewable Income Europe fund with €650m in commitments secured from more than 25 institutional investors in Europe and Asia. Media reports said the final close exceeded the €500m original target.

Australia: energy retailer AGL Energy has set up the country’s largest renewable energy fund alongside two leading institutional investors. Thomson Reuters reported that QIC Global Infrastructure, Queensland’s public-service pension fund, and the Future Fund sovereign wealth fund would contribute A$800m to the new Powering Australian Renewables Fund (PARF). The vehicle plans to develop 1000MW of renewable energy and will acquire two existing AGL solar plants.

Henderson Global Investors has reversed its decision to exclude road-building companies from its investment strategy, saying that “only a small proportion” of respondents to a survey on the subject identified it as a cause for concern. In an investment note, the ESG-focused firm said that roads were “necessary for economic development and vital public service access,” adding that the negative impacts – such as GHG emissions – will reduce as electric vehicles become more widely used. The decision affects three sustainable and responsible investment funds: Henderson Global Care Growth Fund, Henderson Institutional Global Care Managed Fund, Henderson Global Care UK Income Fund.

Old Mutual Investment Group has announced its plans to expand its commercial real estate and agriculture footprints in Africa through a partnership with Nigerian Sovereign Investment Authority (NSIA), Nigeria’s sovereign wealth fund. The partnership will allow for the establishment of two separate investment vehicles, one focusing on agriculture investment and one on real estate investment in the region. The targeted size of the vehicles is US$200m and US$500m respectively. The deal comes a few months after OMIG announced an increase in its overall effective equity stake in African agriculture investment group, UFF African Agri Investments, to 49%.