Responsible Funds, August 23: New Australian ethical equities fund eyes “sustainability dividend”

Hunter Hall, the Australia-based ethical investment manager, has launched a new equities fund. The objectives of the Hunter Hall Australian Equities Fund (AEF) are to outperform the S&P/ASX 300 Accumulation Index and deliver a “sustainability dividend” over rolling five-year periods. This will be achieved by an orientation towards companies with higher environmental, social and governance (ESG) rankings, lower carbon intensity, and ‘constructive engagement’ and shareholder activism to improve companies’ ESG rankings. Link

Meanwhile, the A$5.2m (€3.5m) Hunter Hall Global Deep Green Trust, which invests in ethically screened companies making “a positive impact on the wellbeing of humans, animals and the environment”, rose 6.7% during July, underperforming its benchmark, the MSCI World Index in A$ which rose by 7.4%. The largest contributor to portfolio performance was Australian drug developer Prana Biotechnology. The portfolio’s largest holding is liver cancer treatment company Sirtex Medical.

Hong Kong-based CITIC Capital, which is co-owned by the China Investment Corporation sovereign wealth fund and the CITIC Group conglomerate, has announced a US$113m final close of its CITIC Capital Venture Partners, L.P. fund. The new vehicle will invest in high growth small-to-medium-sized enterprises in the clean technology, consumer and IT & new emerging industries sectors.

The newly renamed A$13.3m Advocacy Fund, the former Climate Advocacy Fund from Australian Ethical, returned -2.4% during the second quarter of 2013, in comparison to the S&P/ASX 200 benchmark index which returned -1.9%. The new approach features an “altered but enhanced” advocacy process as its previous structure “made meaningful engagement with target companies both time-consuming and costly”. As of July 1, the fund has changed its investment style, investing in units of the firm’s Larger Companies Trust instead of the ASX 200-tracking Colonial RealIndex Fund. Link*Canada-based Brookfield Asset Management* has held a US$1bn final close on its Brookfield Timberlands Fund V L.P. fund. The vehicle will invest in timberlands, primarily in the US, Brazil and Australia and may also “pursue opportunities” in Canada, Chile, Uruguay and New Zealand. The commitments exceeded the original US$750m target and investors included institutional investors, including sovereign wealth funds, public and private pension plans and insurers. Brookfield itself committed US$250m. The new fund follows the US$270m final close earlier this year of Brookfield Brazil Timber Fund II L.P.

Alliance Trust, the UK fund manager, says the Sustainable Future equity funds it acquired from Aviva Investors last year emit less than half the carbon dioxide than the conventional benchmarks in which they invest for the three years from 2009-2012. Alliance Trust’s Mike Appleby says this way of investing is “less damaging to our collective environment, less at risk from regulation to curb CO2 emissions and a more a sensible and proactive way of investing”. He said the funds have allocated capital away from carbon intensive companies in favour of companies that emit significantly less emissions than the market.

Greencoat UK Wind, the listed wind energy vehicle which raised £260m in March this year, has invested the proceeds in a 126.5 MW portfolio of six UK wind farms. Chairman Tim Ingram said their performance was “in line with” expectations.

The net asset value of the £105.79m BlackRock New Energy Investment Trust Plc, the London-listed renewable energy vehicle, rose by 5.9% in July. By comparison, the MSCI World Index returned +5.2% and the WilderHill New Energy Global Innovations, an index that is representative of the sector, added +8.0%. Over a year, the trust’s NAV is up 29.7%.