Responsible Funds, August 30: UK ethical funds under management grow to record – IMA

The round-up of responsible funds news

Net retail sales of ethical funds in the UK was £37m (€43m) in July 2013, the highest since April 2011, according to trade body the Investment Management Association (IMA). Funds under management for ethical funds were a record £8.7bn at the end of the month. Their share of total funds under management was steady at 1.2%.

Terra Firma, the UK private equity group, is fundraising for a $3bn renewable energy fund in a sign that it believes in strong interest from institutional investors in green infrastructure. The firm is better known for buyout and residential property funds. The new fund, the Terra Firma Fund for Global Renewable Energy Infrastructure, is reported to be targeting investments in the US, France, Italy and the Middle East.

The Scotia Global Climate Change fund offered by Canada’s Scotia Asset Management is to be terminated and merged into its existing Global Growth fund. The climate fund invests in companies involved in mitigating the impact of climate change. It was launched in 2008 and managed by Sophie Horsfall at F&C Investments. The $7.98m fund has returned 14.87% in the year to the end of July. The global growth fund was launched in 1961 and is managed by Charles Plowden at Baillie Gifford. The move is part of a wider set of fund mergers at Scotia, which takes effect after the close of business on September 13.

Obviam, the investment advisor that was spun out of the Swiss Investment Fund for Emerging Markets (SIFEM), has invested in the new Armstrong SE Asia Clean Energy Fund on behalf of SIFEM. “We expect the Fund to a play an important role in fostering the application of Clean and Renewable energies in the region, working towards minimizing fossil fuel based dependence,” said Obviam CEO Claude Barras. Also investing are the IFC Catalyst Fund and Dutch development institution the FMO.The decision to recommend a merger of the Calvert Tax-Free Reserves Money Market Portfolio, Calvert First Government Money Market Fund, and two other money-market funds into Calvert Ultra-Short Income Fund was “not an easy one” says Barbara Krumsiek, CEO of sustainable fund firm Calvert Investments. “But we can’t escape the fact that the money-market fund environment today is dramatically different now.”

San Francisco-based real estate investor Virtú has opened its third equity fund – investing in apartments in the Western US with a focus on “cost-effective energy and water efficiency retrofits as well as other green building improvements”. The Virtú Multifamily Opportunity Fund-III, LP vehicle will use the firm’s ‘GreenLiving Sustainability Program’.

The UK government has announced that next year’s Coastal Communities Fund will be worth £29m, a 5% increase. The fund was launched in 2012 to invest in seaside towns and villages, helping them achieve their economic potential, reduce unemployment and create new opportunities for young people in their local area.

The €304m Pictet Clean Energy fund has changed its negative view on the renewables sector given increased Asia and especially China demand, according to an interview with co-manager Luciano Diana cited by Citywire. He’s quoted saying China’s clean energy market could be as big as Germany’s by next year.

Foresters Community Finance, a Community Development Finance Institution which backs the community sector in Australia, has reportedly launched a fund aimed at providing financing for early stage social enterprises called the Early Stage Social Enterprise Fund. The Sustainability Report quoted Foresters’ CEO Belinda Drew as saying it has been designed to “put recipients on the road to long-term sustainability”.