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Responsible Funds, February 16: Erika Karp’s Cornerstone nears $1bn in AUM

The latest responsible funds news

ESG-driven financial services firm Cornerstone Capital Group is nearing $1bn in assets under management (AUM), according to an announcement on its website. Founded by former UBS managing director Erika Karp in 2013, the New York-based company has been active as a registered investment adviser (RIA) for three years. The development puts Cornerstone in the top 15th percentile of US RIAs in terms of AUM. Karp said: “At Cornerstone, we believe that capitalism can be a force for good and that impact investing could provide higher long-term returns, while also benefiting society more broadly. This assertion is demonstrated by our rapid growth, and we will maintain our unwavering commitment to this investment discipline.”

Berenberg Asset Management, the funds arm of the German private bank, is incorporating a 40-ESG marker sustainability screening into its new emerging market debt strategy, according to reports. The Berenberg Sustainable EM Bonds fund is intended to achieve outperformance based on systematic country allocation and bond selection. The fund is managed by portfolio manager Frederic Waterstraat, who currently co-manages the Berenberg Global Bond Selection fund alongside vice president and senior portfolio manager Robert Reichle. A retail fund will be launched shortly.

Nissay Asset Management (NAM), a Tokyo-based active investment manager with around $100 billion in assets under management, is launching the first Japanese mutual fund dedicated to the Sustainable Development Goals (SDGs) at the end of February. The fund will be investing in companies that contribute to SDGs achievement, although the methodology is not stated. NAM is a member of the PRI’s SDGs and Active Ownership Working Group. It is also the investment arm of Nippon Life Insurance Company, Japan’s largest insurer by revenue.

The Lab, a public-private initiative composed of government representatives, investors, and experts on sustainable investment, has selected nine ideas aimed at overcoming persistent investment barriers in clean energy, low-carbon transit and sustainable land use in developing countries. These include lowering ownership costs of electric buses and leasing residential solar systems in India and financing smallholder farmers to create sustainable wood supply in Kenya and the Amazon. The ideas will be further developed before being launched for piloting at the end of the year.Australian banking group ANZ says it has launched and priced its first Sustainable Development Goals (SDG) bond, raising A€750m (€477m) to promote nine of the 17 SDGs. The proceeds will fund hospitals, schools, green buildings, clean water, public transport systems or renewable power plants. The five-year fixed rate bond went mostly to European institutional investors. A second-party opinion from Sustainalytics said: “The ANZ SDG Bond Framework creates meaningful impact, is transparent, credible and aligns with the Green Bond Principles 2017 (GBP), the Social Bond Principles 2017 (SBP), and the Sustainability Bond Guidelines 2017.” ANZ Head of Group Funding Mostyn Kau said the bank was “responding to growing fixed income investor interest in using the SDGs as an impact measurement”.

Finland’s Elo, signatory to the PRI and responsible investor, has announced the best results of its history in 2017 with an overall return on investments of 7.4 per cent and an increase of €1.6b in pension assets. The value of Elo’s investments were €23.1bn at the end of 2017.

Nia Impact Capital has announced the launch of its women-led Registered Investment Advisor (RIA), Nia Impact Advisors, to capitalise on the growing demand for impact investing solutions. Nia Global Solutions Equity Portfolio, the firm’s flagship portfolio, boasted a 37.59 per cent return in 2017, outperforming the S&P 500 by 15.77 per cent. It consists of 45 to 50 publicly traded stocks, with 65 per cent or more invested in small- and mid-cap stocks. Capital is allocated to companies with diverse leadership with an emphasis on gender.

Litigation finance group Therium has announced a £200m first close of its largest fund – with a £300m final close anticipated. It follows Jersey-based Therium’s £200m fund raised in April 2015, the largest single investment in the litigation funding sector at the time. Litigation funding allows claimants to finance the cost of commercial litigation and arbitration, in return for an agreed share of the proceeds of successful claims. It provides investors a hedge against exposure to more mainstream investment classes.

Cape Town could be left without drinking water supply from its pipelines this April, Swiss ESG house RobecoSAM has warned. In its latest client report, RobecoSAM’s £803m Sustainable Water Fund says South Africa is facing “major challenges” following three years of drought. The fund also reported buying further shares in Suez after prices dropped following a profit warning. It now has 5.08% of the French utilities giant.