Responsible Funds, August 7: Allianz Global Investors, Metzler, RobecoSAM, SUSI Partners, Phaunos

The latest responsible funds news

Allianz Global Investors (AGI) has decided to pull the plug on its Global EcoTrends fund for the UK market due to weak demand, press reports say. According to the reports, the fund, which has taken in £6.3m (€8.9m) in assets in the seven years since its launch, will be closed at the end of October. “The fund is no longer economically viable and too small to be managed efficiently,” AGI was quoted as saying. The closing, however, does not affect AGI’se EcoTrends fund domiciled in Luxembourg, which has €153m in assets. Both funds target companies in the renewable, pollution control and water sectors.

RobecoSAM, the Zurich-based sustainable asset manager with near $11bn in assets, has become a member of the Portfolio Decarbonisation Coalition (PDC). In a statement, RobecoSAM said the move meant that by mid-December, it would seek to reduce the greenhouse gas emissions in its core investment strategy by 20% and also consider the merits of “selective fossil fuel divestment.” Citing further examples of its commitment to the climate, RobecoSAM said it has been carbon neutral since 2001 and supports forest protection efforts in Brazil and Kenya. Announcement

Washington state’s Central Puget Sound Regional Transit Authority (‘Sound Transit’) has executed what it says is the world’s largest issuance of municipal green bonds. “Sound Transit yesterday executed the sale of nearly $1bn of green bonds that will help fund voter-approved regional transit projects, including construction of more than 30 miles of light rail extensions,” ST said this week. It added the issuance is “fully compliant” with the Green Bond Principles, validated through an independent opinion commissioned from Sustainalytics.

SUSI Partners, a Zurich-based asset manager, says its Renewable Energy Fund II has taken in €121m in assets from investors following a recent closing and that the money has been fully allocated to renewable assets. According to SUSI, the assets acquired are located in Germany, France and Portugal and, together, have a total capacity of 130MW. Like its predecessor, Renewable Energy Fund I, the SUSI fund targets operational solar and wind power facilities across Europe and aims to deliver returns of between 6 and 7% per annum over a span of ten years. The fund’s target volume, including leverage, was put at €500m.

Allianz Capital Partners (ACP), the infrastructure investment arm of the German insurance giant, has made it latest wind park purchase in Sweden, acquiring a 33MW greenfield facility from Arise AB, the project developer. Financial details were not disclosed. Arise will both build and operate the wind park, called Mombyåsen, on behalf of ACP. “We are pleased that this marks our fifth transaction, or a total of 128 MW, in a time period of only nine months, demonstrating our capability to deliver on our strategy,” said Peter Nygren, Arise’s Chief Executive. Excluding Mombyåsen, ACP has invested €2.5bn to acquire renewable assets in Europe.German private bank Metzler has launched a new fund which invests in European companies that pay high dividends and that score highly in terms of ESG (environmental, social and governance) performance. In a statement, Metzler said the fund, called European Dividend Sustainability, comprised between 50 to 60 companies drawn from the MSCI Europe universe and some with smaller market capitalisations. “By excluding companies that have controversial businesses, we are able to reduce the risk of substantial losses,” said Oliver Schmidt, the fund’s manager. Metzler sources its research on corporate ESG performance from Oekom research.

TIAACREF, the US financial services firm, has raised $3bn (€2.7bn) from 20 investors, including several from the responsible investment (RI) space, for a second fund targeting farmland in North and South America as well as Australia. The investors participating in TIAACREF’s Global Agriculture II (TCGA II) fund include AP2 of Sweden, the UK’s Environment Agency Pension Fund as well as TIAACREF itself. TCGA will be managed by specialists at TIAACREF and an affiliate. “With its low correlation to traditional asset classes like stocks and bonds, farmland offers excellent portfolio diversification benefits for investors and a hedge against inflation,” said Jose Minaya, Head of Private Markets Asset Management at TIAACREF.

UK insurer Friends Life, acquired by Aviva Investors last December, plans to transfer £24bn (€34bn) worth of segregated mandates from AXA Investment Managers (Axa IM) to its new parent company by the end of 2015, press reports say. The mandates to be handed to Aviva Investors include equity, fixed income, property and multi-asset solutions. Axa IM will, however, retain £11bn worth of mandates from Friends Life, the reports say. “We have decided at this stage to move some funds currently managed by AXA IM to Aviva Investors later this year,” a Friends Life spokesman was quoted as saying.

The Altius Sustainable Bond Fund, an Australian fixed income fund aligned with ESG principles, has been added to the Netwealth retail investment platform. Bill Bovingdon, Altius chief investment officer, said that since launching the fund there had been a “very high level of interest, particularly from not-for-profit organisations”. He also expected demand from other institutional investors. Companies excluded from the fund are those whose activities involve armaments, gambling, tobacco, pornography, alcohol, or the production or sale of thermal coal. Link

Phaunos Timber Fund, the London-listed forestry investment vehicle, has announced an agreement in principle for a capital infusion in its Matariki Forestry Group venture. The deal is with its joint venture partner Rayonier, which will provide a capital infusion for the repayment of all outstanding amounts under its existing NZD235m credit facility and for general purposes. Stephen Addicott, a Partner of Stafford Capital Partners, the manager of Phaunos, said the reduction of the debt was a key objective since it became manager in July 2014. Link