Responsible Funds, December 12: CalPERS, UN pension fund, Church Commissioners, Australian Ethical

The round-up of responsible funds news

The California Public Employees’ Retirement System (CalPERS), at around $300bn the largest US public pension fund, has called for global climate policy action on climate change at the United Nations’ Climate Change Conference in Lima, Peru. The fund represented the 100-strong Investor Network on Climate Risk (INCR). “CalPERS has a fiduciary duty to protect the investments of our members and the effects of climate change have the potential to seriously impact our portfolio,” said Bill McGrew, CalPERS Portfolio Manager, speaking for the pension fund at the conference.

The Church Commissioners for England, the £6.1bn (€7.7bn) faith investment body, has bought a forestry portfolio for £49m. The purchase, from UPM Tilhill, means the Commissioners are the largest private commercial forestry investor in the UK. It comprises 15 separate forests (13 in Scotland and two in Wales) and includes two operating wind farms and a mountain biking centre. Edward Mason, Head of Responsible Investment at the Commissioners said: “The Commissioners are delighted to be adding to their low carbon investments with this further significant investment in sustainable forestry.”

Sydney-based SRI fund firm Australian Ethical says it has reached the A$1bn (€667m) funds under management figure, which it called a “significant milestone” in its 26-year history. “It marks a coming of age and maturing of the company,” said Managing Director Phil Vernon. He went on: “It is an absolute myth that returns need to be compromised to invest in an ethical manner and our strong track record is living proof of that.” Its flagship Smaller Companies Trust, which recently celebrated its 20th anniversary, has returned 10% per annum over its 20-year history, “far exceeding its benchmark index”. Announcement

The board of trustees of private Massachusetts university Tufts has approved the establishment of the Tufts Sustainability Investment Fund which will allow donors to earmark their monetary gifts for investments that meet ESG criteria. It is being implemented on the recommendation of a working group appointed last year to look at issues of divestment from fossil fuels after pressure from students. Ben Weilerstein, a member of Tufts Climate Action (formerly Tufts Divest) who was also in the working group, said he was disappointed that the group did not seriously explore the option to fully divest from fossil fuels.

UK infrastructure manager Foresight Group says its Solar Fund Ltd. has acquired a 46MW solar park in Oxfordshire, southern England. Foresight said the Jersey-based fund had raised £60m (€76m) from investors and would use that money as well as loans to finance the acquisition of the park, known as Landmead, as well as two others in the UK which have another 74.5MW of capacity. Established in 1984, Foresight Group has £1.3bn in assets under management. Its solar park investments in the UK, the US and southern Europe are worth £930m. Link

Bridges Ventures, the UK social investment group, is to invest £1.5m in three social impact bonds designed to reduce homelessness among young people not in education, employment and training. The three social impact bonds are among seven to be backed by a £15m UK government scheme to support 2000 homeless young people over a three-year period.The $53bn United Nations Joint Staff Pension Fund has reportedly backed two new low carbon exchange traded funds from asset management giants BlackRock and State Street. According to a Reuters report, the UNJSPF seeded both the former’s iShares MSCI ACWI Low Carbon Target ETF and State Street’s SPDR MSCI ACWI Low Carbon Target ETF. Both new funds use the MSCI ACWI [All Country World Index] Low Carbon Target Index, the report added.

What’s being termed a “compromise agreement” has been reached between the European Parliament and the member state-level European Council on a new regulation aimed at increasing the pool of capital available for long-term investment into the EU economy by creating a new form of fund vehicle. These European long-term investment funds (ELTIFs), by virtue of the asset classes that they would be allowed to invest in, are expected to be able to provide investors with long-term, stable returns, the authorities said. A statement said: “The Council will adopt the regulation at a forthcoming meeting without further discussion, once the text has been finalised in all languages.” Link

Danica Pension, the Danish pensions provider owned by Danske Bank, has raised DKK1bn (€134m) for a new private equity fund that will invest in Danish small- to midsize enterprises (SMEs). According to a Reuters report citing Danica officials, the fund is targeting SMEs with at least DKK150m in annual revenue.

TriLinc Global, a California-based social impact investor, says its Global Impact Fund will provide $11.9m in trade finance to small and midsize enterprises (SMEs) in South Africa and Argentina. Most of the $11.9m went to two South African firms, namely a textile distributor and an agricultural chemicals firm. The remainder was given to a soybean distributor in Argentina. “By providing financing to SMEs in developing economies that are active in trade, TriLinc contributes to their growth and stability, which in turns supports jobs and dynamic communities in the countries they operate,” said TriLinc’s Chief Executive Gloria Nelund. Link

Two microfinance funds run by Austria’s Absolute Portfolio Management (APM) have invested $11m (€8.9m) in microfinance institutions (MFIs) based in Cambodia, Costa Rica, Ecuador, Kyrgyzstan, Mexico, India, industry news portal Microcapital reports, citing APM. APM’s ‘Dual Return Fund-Vision Microfinance’ and its ‘Dual Return Fund-Vision Microfinance Local Currency,’ which, according to Microcapital, have taken in a total of $320m in assets. Microcapital also reported that of the $11m in new investment, $1m went to an MFI in Oaxaca, Mexico that, through its branch network, provides loans to people in eight Mexican states.

The Pictet Timber Fund outperformed the MSCI World index by close to 3% over the month of October, according to fund documents. Pictet said: “During the month we added two new stocks to the portfolio: Boise Cascade, the American engineered wood producer which published solid results, and Nine Dragons, a Chinese containerboard producer which had an attractive valuation. We sold Rock-Tenn and reinvested the proceeds into Kapstone, a smaller containerboard producer which does not have to do any downtime when end markets get softer.”

Triodos Renewables Plc, the listed green investor that’s part of Dutch-based Triodos Bank, has raised just over £2m of its planned £5m 2014 share issue. The issue closes on January 31 2015 and the minimum investment is just over £50.