Responsible Funds, December 1: Development banks back new European ‘Marguerite’ fund

The latest responsible funds developments.

The European Investment Bank (EIB) has launched a new €700m European infrastructure fund to succeed its 2020 European Fund for Energy, Climate Change and Infrastructure. Marguerite II, which aims to catalyse infrastructure investments in renewables, energy, transport and digital infrastructure, has received a €100m commitment from each of five national public finance institutions, including: Polish Bank Gospodarstwa Krajowego (BGK), the French Caisse des Dépôts Group (CDC), the Italian Cassa depositi e prestiti (CDP), the German Kreditanstalt für Wiederaufbau (KfW) and the Spanish Instituto de Crédito Oficial (ICO). The EIB will provide the remaining €200m, with the European Fund for Strategic Investments (EFSI) guaranteeing €100m.

Index firm FTSE Russell has expanded its sustainable index offering with the launch of two new indexes – the FTSE Global Climate Index Series and FTSE ESG Index Series Index. The FTSE Global Climate Index Series – which weights companies by three climate change measures: fossil fuel exposure, carbon footprint, and green revenues exposure – has been designed to help investors “transition to a green economy”. The FTSE ESG Index Series aims to provide a benchmark that allows investors align investment and ESG objectives.

The Brunel Pension Partnership has become the first of the UK’s eight new national ‘pooled’ local government pension scheme funds to join the Institutional Investors Group on Climate Change.

Nordea has launched a Europe-focused equity fund to its ESG-centric ‘Stars’ range, according to Citywire Selector. It said the Luxembourg-domiciled Nordea European Stars Equity fund was launched last month and that it would be overseen by the firm’s fundamental equities team. The fund, to be managed by Thomas Sorensen and Kasper Elmgreen, would be benchmarked against the MSCI Europe NR EUR.

The Nobel Sustainability Trust, founded by members of Alfred Nobel’s family, has launched a £100m sustainability fund in partnership with Sustainable Technology Investors, the London based venture capital firm founded by Stephen Lansdown – the billionaire co-founder of Hargreaves Lansdown. Focused on the UK, the Nobel Sustainability Growth Fund will make sustainable private equity investments in technology, manufacturing, services, and asset development businesses using proprietary sustainability measure, Earth Dividend.

A guerrilla ETF championing women’s empowerment is set to be launch early next year by Dallas-based non-profit exchange-traded fund (ETF) provider, Impact Shares, Reuters reports. The YWCA Women’s Empowerment ETF is expected to launch in the first quarter of 2018, aiming to enable people to invest with companies that promote women’s interests and take strong stands against workplace harassment. The YWCA fund will track the Equileap North American Women’s Empowerment Index, comprising a subset of the 1000 largest US companies by market value that are “empowering to women.”

Impax Asset Management Group has reported that its assets under management and advice have risen 61% to a new peak of £7.3bn. It has seen record net inflows of £2.1bn across several strategies and geographies. The firm, which recently announced it was buying Pax World, also reported “strong progress” with fundraising and first investments for a third renewable energy private equity fund.Norway’s $1tn sovereign wealth fund has increased its votes against management compensation proposals since it committed – in April 2017 – to curb excessive and opaque top-management pay in the companies it invests in, Bloomberg reports. Norges Bank Investment Management (NBIM) – manager of the Government Pension Fund Global – has, this year, voted against pay plans at Alphabet Inc., Google’s holding company, offshore driller Noble Corp., and media company Liberty Global Plc.

NBIM has also published a discussion note to underpin its recent advice to Norway’s Ministry of Finance to remove oil and gas stocks from the benchmark index of the country’s giant oil fund. The note analyses and discusses the short- and long-term effect of falling oil prices on the fund and its equities.

The UBS Optimus Foundation has co-invested $3.5m in a healthcare-focused development impact bond aiming to reduce mother and baby deaths in Rajasthan, India. The impact bond was designed by consultancy Palladium, and the U.S. Agency for International Development and NGO MSD for Mothers have committed up to $8m in outcome funding if measured targets on improving maternity care are met

Affirmative Investment Management is planning to launch an Impact Cash Fund next year, RI has learned. The London-based “green and impact bond fund management company” has seen its assets under management rise to over $400m in 2017. Affirmative currently manages the Lombard Odier Climate Bond Fund and a segregated institutional mandate.

Anglo-Dutch consumer goods giant Unilever has reportedly launched a $100m start-up fund for businesswomen of colour as part of its agreement to acquire Sundial Brands, the New York-based producer of hair and skincare products for people of colour. The fund, which starts with $50m in seed capital and plans to raise another $50m, aims to channel capital into businesses founded and run by a group that currently only get 0.2% of all venture capital funding.

UK fund firm Rathbones’ Ethical Bond fund has reportedly surpassed £1bn in assets under management – the only ethical bond fund to reach that milestone. The fund, managed by Bryn Jones and Noelle Cazalis, now holds more than double the assets of the next largest ethical funds in the IA Sterling Corporate Bond sector – the £458m Kames Ethical Corporate Bond fund and £451.1m Liontrust Sustainable Future Corporate Bond fund.

Calvert Research and Management, the US SRI house that is now part of Eaton Vance, has revealed that the worst performing company in its Calvert Small-Cap Fund was US supplier of sand used for drilling oil and gas wells, US Silica Holdings. In its Annual Report filed with the US Securities and Exchange Commission, it revealed that for the year ending 30 September 2017 the fund had a total return of 19.74%, below its benchmark (Russell 2000 Index) return of 20.74%.

The Meloy Fund, a sustainable coastal fisheries impact investment fund focusing on Indonesia and the Philippines, has closed an additional $7m in investment from its anchor investor, Global Environment Facility (GEF) and US single-family office, Ceniarth. The fund, whose investors are guaranteed by United States Agency for International Development (USAID), is managed by conservation organization Rare, which is looking to raise a total of $20m.