Responsible Funds, December 16: Sweden’s AP1 tenders high-yield debt with ESG component

The round-up of the latest responsible funds developments

Första AP-fonden (AP1), the SEK298bn (€30.4bn) First Swedish National Pension Fund, has issued a tender to broaden its high-yield investment universe. The tender is open to: Global High Yield; US High Yield; and European High Yield. The current allocation to the asset class is approximately 4 % of the fund’s total assets under management. The tender states: “In the evaluation process special attention will be paid to how the manager considers and integrates ESG factors in the investment process.”

NN Investment Partners, the funds arm of the Dutch insurer the NN Group, has launched a new actively managed ‘balanced’ sustainable fund that invests in both equities and bonds. The Patrimonial Balanced European Sustainable fund currently has around €100m in assets under management and is aimed at the ‘balanced investor’ who wants to “invest responsibly without financial compromise”. The benchmark of the fund is 50% MSCI Europe (net) + 50% Barclays Euro Aggregate.

Phitrust Partenaires, the Paris-based corporate governance and impact investment specialist has launched a €20m partnership with the European Investment Fund on a 50/50 asset basis, which will invest in various European social projects. The venture will also look to strike up additional partnerships with social funds in Belgium, Spain, Italy and Northern Europe.

The K Invest Low Carbon Global Equity fund of Danish financial consultant Kirstein A/S will be subadvised by Unigestion, the boutique asset manager with US$20bn in assets. Kirstein A/S’s fund proves it is possible to significantly reduce the carbon footprint of a portfolio without foregoing risk-adjusted returns, representatives of Unigestion said.

Omnes Capital’s Capenergie 3 fund was conferred the label “Energy and Ecological Transition for the Climate” by the French Ministry of the Environment, Energy and the Sea. The label promotes the allocation of savings towards energy and ecological transition projects, on the back of a framework of public initiatives instituted by the French law on Energy Transition for Green Growth of August 2015. Omnes Capital is an employee-owned renewable energy private equity firm and a former subsidiary of Crédit Agricole. It has €800m of AUM and has financed the construction of over 1.5 gigawatts of renewable energy generation projects since 2006, said Serge Savasta its Managing Partner. He added that Capenergie 3’s target is the construction of 50 projects representing a total of 750 MW of electricity and heat generation capacity.Two ESG funds, John Hancock ESG Core Bond Fund and John Hancock ESG International Equity Fund, have been added to the portfolio of Boston-based John Hancock Investments. The first one, managed by Breckinridge Capital Advisors, invests in both corporate and taxable municipal debt. The second, managed by Boston Common Asset Management, invests in developed and emerging market equities across the market capitalisation spectrum, the firm said. Part of John Hancock Financial (a subsidiary of Canadian insurer Manulife), John Hancock Investments launched this year two other ESG funds managed by Trillium Asset Management.

An investment solution to promote the UN Sustainable Development Goals (SDGs) has been announced by the World Bank and BNP Paribas, which are promoting in partnership the initiative with the participation of undisclosed institutional and retail investors worldwide. “This effort is in direct response to the UN Secretary-General’s launch of a Financial Innovation Platform (FIP) that calls for innovations and new financial models in support of the SDGs,” said Olivier Osty, Executive Head of Global Markets, BNP Paribas. The partners of the initiative said they will launch a program of equity index-linked World Bank bonds whose performance will be linked to that of the Solactive Sustainable Development Goals World Index. Such index compiles eligible companies measuring SDGs against their products, services and behaviours, based on Vigeo Eiris’ Equitics research, the partners added.

The Green Climate Fund, the Korea-based fund that assists developing countries with climate change, has approved $315m in funding for eight new proposals, featuring $133m for Catalyzing Private Investment in Sustainable Energy in Argentina with the Inter-American Development Bank (IDB) and an initial $17m for the Pacific Islands Renewable Energy Investment Program with the Asia Development Bank (ADB), to begin with a project in the Cook Islands. There was also $28.2m for Accelerating the Transformational Shift to a Low-Carbon Economy in the Republic of Mauritius with the UN Development Programme. It means more than $1.3bn in GCF resources was committed to funding proposals in 2016.

The European Investment Fund (EIF) is looking for a service provider that is specialised in fund administration and monitoring of fund-of-funds and having the capacity to “on-board” all the activities linked to mandate services for all types of mandates entrusted to EIF. The estimated value of the eight-year (96-month) contract is €8.6m and the deadline for the receipt of tenders is February 6 next year.