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Responsible Funds, Dec. 7: Hermes, NTR, Impax, Fonds de solidarité FTQ, UBS AM, Nomura/ACI

The latest responsible funds news

Federated Investors, the New York-listed fund manager, has announced the launch of the Federated Hermes SDG Engagement Equity Fund, which focuses on companies that have the “willingness and ability” to align with the United Nations’ Sustainable Development Goals. The fund invests primarily in equity and equity-related securities of small and mid-cap firms. It’s the first Hermes strategy to be offered as a US mutual fund following Federated’s acquisition of a majority stake in ESG specialist Hermes this year. The new fund follows the investment strategy of the $296.9m Hermes SDG Engagement Fund that was launched in December 2017 as a UCITS product, which is not available to US investors. The fund, managed by Hamish Galpin, uses the MSCI All Country World SMID Index as its benchmark.

The European Investment Bank is making a €84m investment in the NTR Renewable Energy Income Fund II. The fund will support greenfield onshore wind and solar projects, as well as energy storage schemes associated with wind and solar projects. The EIB support represents its first ever backing for investment through an Irish Collective Asset-management Vehicle or ICAV, a new fund structure recently developed in Ireland.

Impax Asset Management says it is in “advanced discussions” with the Central Bank of Ireland to set up an Irish arm due to Brexit. Assets under management at the sustainability fund firm reached £12.5bn at the end of September – with net inflows of £1.46bn “predominantly from clients in continental Europe and North America” it said in its year-end results.

TPG is raising funds for a second impact investment fund, according to Private Equity News. It reports that an investment memorandum disclosed by the New Jersey State Investment Council spoke of committing $125m to $3.5bn Rise Fund II LP. TPG raised $2bn for its first impact investment fund, one of the largest ever.

The Pensions and Lifetime Savings Association (PLSA), the UK body, has published a guide to patient capital and illiquid investment. The 24-page study pulls together case studies from pension funds and asset managers.New Zealand Prime Minister Jacinda Ardern has announced a new NZ$100m (€60m) green investment fund called Green Investment Finance Ltd. to help reduce the country’s greenhouse gas emissions. She said: “No one can opt out of the impacts of climate change. This fund helps business to opt in to the solution.” It will be a “commercially focused investment company” the government said. It will be chaired by Cecilia Tarrant, a former Morgan Stanley executive who chairs the Government Superannuation Fund Authority. Director David Woods was most recently Managing Director of social finance/impact investing group Oikocredit International.

Canada’s Fonds de solidarité FTQ has become the first investor to announce that it will integrate the MSCI World Low Carbon ESG Target Screened Index in the management of a C$1.3bn portfolio, by the end of its financial year on May 31, 2019. “The new index will contribute to the Fonds’ commitment to reduce the carbon footprint of its investments in public companies by 25% between now and 2025,” it said. Based on the MSCI World Index, the MSCI World Low Carbon ESG Target Screened Index includes large and mid-cap stocks across 23 developed market countries.

The new Nomura ACI Advanced Medical Impact Fund has attracted more than US$1bn from Japanese investors since launch on October 23, according to a statement. It’s a collaboration between American Century Investments and Nomura Asset Management, exclusively available to Japanese investors, that focuses on US health care companies while being aligned with SDG3 (“healthy lives”).

UBS Asset Management has launched a passive strategy for the transition to a low-carbon economy called the UBS CCF (IE) Global Climate Aware Ucits fund. It’s domiciled in Ireland under a common contractual fund structure and has already attracted more than €250m at launch. It follows the launch of the UK-domiciled UBS Life Climate Aware World Equity Fund in February last year – which has already notched up more than £736m (€827m).