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Responsible Funds, February 27: Aviva, Advocacy Fund, GAM, Khazanah, Deutsche Bank

The round-up of the latest responsible funds news

Fund manager Aviva Investors has teamed up with the Pensions Infrastructure Platform (PiP), the UK’s National Association of Pension Funds initiative, to launch PiP’s first solar photovoltaics (PV) fund. It aims to deliver “predictable, long-term inflation-linked cash flows” through investing in small-scale solar PV installations in the UK. The return objective is materially to outperform inflation-linked government bonds, with the fund expected to generate quarterly income for pension fund investors. The fund will have a hard cap of £250m and the first close of the fund is expected in the second quarter.

The Advocacy Fund from Australian Ethical, the Sydney-based SRI specialist, returned 7.0% in the quarter to the end of December, according to the company. That compares to a 6.5% return from its blended benchmark over the period. “The Fund’s natural overweight positions in the defensive and higher yielding sectors of Healthcare and Utilities performed well in this environment, delivering the bulk of the Fund’s outperformance for the quarter,” it said. Over the year it has returned 16.8% or 5.7% over benchmark. The fund seeks to actively engage directly with companies to pursue “improved sustainability outcomes and corporate behavior”.

GAM, the Swiss listed investment group, has signed up to the UN-supported Principles for Responsible Investment (PRI) as part of its new approach to ESG. CEO Alexander Friedman said: “As active investors, we have a responsibility to explore all factors that could potentially impact the financial performance of individual companies in which we invest – and these often include ESG issues. Becoming a signatory of PRI reinforces our commitment to fully discharge that responsibility and it is also the right thing to do as an engaged corporate citizen.” Home page

Hedge fund Applied Investment Management has chosen a group of business students to manage a new $250,000 public equity fund using socially responsible principles. Students at the university of North Carolina Kenan-Flagler Business School will run the AIM Global Perspectives Fund as part of their studies. Announcement

Bloomberg reports that Blackrock is buying a 50% stake in three wind projects developed by Electricite de France SA in Texas. BlackRock declined to disclose financial terms. The projects are being developed by San Diego-based EDF Renewable Energy, a unit of the French utility. Link*Malaysia’s giant MYR144bn (€35.7bn) state fund Khazanah* Nasional reportedly plans to issue a sukuk, or Islamic bond, worth up to MYR1bn to help fund schools. Reuters was citing Khazanah’s Managing Director Azman Mokhtar as saying the planned “social impact sukuk” was awaiting regulatory approval. He was quoted saying on the sidelines of a conference in London that the objective was not fund raising: “We could fund this ourselves. This is to open it up to others.”

Deutsche Bank’s Global Social Finance Group has released an assessment report for its $83m (€73.9m) microfinance fund. The fund provided subordinated, long-term debt to 21 microfinance institutions in 15 countries reaching 5.5m low-income and rural borrowers. Deutsche Bank was the first global bank to establish a socially motivated microfinance fund in 1997, managed by its Global Social Finance Group

UBS Global Asset Management has launched six new Exchange-Traded Funds (ETFs) tracking MSCI indices which screen out tobacco and ‘controversial weapons’. UBS Global Asset Management head of Australia and New Zealand Bryce Doherty said: “These funds have been brought to market in response to continued demand from clients, advisers and institutions for access to global index-based investment solutions with an ethical philosophy.”

Internet giant Google has committed $300m (€267.3m) to US-based clean energy provider SolarCity’s new
$750m (€668.3m) fund supporting residential solar projects. The fund will cover the upfront cost of solar panel installations for homeowners across the US. Sidd Mundra, Google’s renewable energy principal, said: “We’re happy to support SolarCity’s mission to help families reduce their carbon footprint and energy costs.” It is Google’s largest renewable energy investment to date. Separately, Google will invest $1m (€890, 371) to support educational initiatives aimed at narrowing the “digital divide” in Latin America.

The UK’s childcare minister Sam Gyimah has reportedly launched a £500,000m (€685,961m) fund to boost social investment in childcare. The Childcare Readiness Investment fund will support organisations in becoming more attractive to investors. Gyimah said, ‘There is unprecedented demand for childcare – social investment would add to the record amount of money we are giving to the sector to help the market meet modern families’ needs.”