Responsible Funds, August 2: Nordea, BlackRock, M&G, HESTA and more

The latest responsible funds news

BlackRock has launched another in its LEAF fund family, which invests in assets that meet “explicit environmental and other characteristics, including social and governance”. The BlackRock Institutional Cash LEAF series is a UCITS fund range focusing on sterling, euro and US dollar, and joins the US LEAF, which the firm launched last month. 5% of the net revenue from management fees of the funds will be used to buy and retire carbon offsets.
Nordea closed its ethical EM equity fund last month after assets dropped, according to media reports. According to marketing, the Luxembourg-domiciled Nordea 2 – Emerging Markets Aksjer Etisk fund sought to invest in undervalued companies following ethical criteria of the Nordea Responsible Investments Committee. Launched in September 2016, the fund was managed by Juliana Hansved and Emily Leveille.
The news comes as Nordea also launches a fixed-income ESG fund for its investors in Switzerland. The Nordea 1 – European Corporate Stars Bond Fund exceeds €170m and uses the firm’s in-house ESG research to score investments in a bottom-up selection of investment grade corporate bonds.
Tortoise has launched three new UCITS sustainability funds, respectively focusing on the low-carbon transition, sustainable infrastructure and water security. The Tortoise Energy Transition UCITS fund, the Tortoise Sustainable Listed Infrastructure UCITS Fund and the Tortoise Sustainable Global Water UCITS Fund are all part of its Ecofin platform, which hosts all of Tortoise’s sustainable and impact strategies.
UK church body CCLA is now offering its clients a ‘fossil free’ option, having committed to divest its COIF Charities Ethical Investment Fund from companies that generate more than 10% of their revenue from fossil fuel production.
Demand for off-the-peg ESG is growing in Europe, but hurdles remain, according to the latest issue of The Cerulli Edge – Global Edition. In the paper, research and consulting firm Cerulli Associates finds that diverse approaches to ESG, as well as the current limitations of ESG in the fixed income space, are holding back the rollout of ready-made ESG portfolios. Read the whole paper here.HESTA, the A$50bn (€31bn) super fund for Australia’s health and community services sector, has committed A$20m to a project aimed at providing affordable housing in Melbourne. The super fund is partnering with a housing organisation and a not-for-profit on the apartment project, which it has said could be replicated at scale to help improve access to housing, for example for those working in key community occupations. More than 80% of HESTA members are women working in the health and community services sector.
UK funds group Liontrust has announced it will acquire Neptune Investment Management – a buy-out that will take Liontrust’s total assets from £2.8bn to £17bn. All of the Neptune team will join Liontrust’s London offices, including CEO Robin Geffen, who will “be able to focus on managing funds […] and not have to run an asset management business”. Liontrust made a similar move back in 2016, when it bought Alliance Trust’s sustainability business in a £30m deal. The Neptune acquisition is expected to complete in October, at which point the funds will be rebranded as Liontrust.
Franklin Templeton’s social infrastructure impact fund has acquired a further six assets in the education and healthcare sectors in Denmark, Germany, Italy, Sweden and the UK. Managed by Franklin Real Asset Advisors, the Franklin Templeton Social Infrastructure Fund now has a total of nine assets, valued at €200m.
Phoenix Group, the London-listed closed life assurance fund consolidator, has committed £43m of long-term debt to finance an operational wind farm in south-west Scotland, an investment arranged by Aberdeen Standard Investments.
M&G has launched a new emerging markets corporate debt fund with an ESG focus – the M&G (Lux) Emerging Markets Corporate ESG Bond fund. Benchmarked against the JPM CEMBI Broad Diversified Index, the Luxembourg-domiciled SICAV will perform two layers of negative screening and then use internal and external ESG research to select leading companies. The strategy will be managed by Charles de Quinsonas, with the support of head of emerging market debt Claudia Calich.
UniCredit, Italy’s largest bank by assets, has listed two ETFs based on the first Eurozone indices which combine a multi-factor approach and ESG exclusion screens. The STOXX-licensed indices are built on Sustainalytics data and exclude controversial weapons, tobacco, thermal coal, nuclear power and stocks in contravention with the Global Compact principles. The are listed on Deutsche Borse.