Responsible Funds, February 24: LGT Capital Partners, AXA IM, Pax World, Bridges Ventures

The round-up of the latest responsible funds news

The €357m LGT Sustainable Equity Fund from Liechtenstein’s LGT Capital Partners returned 20% in 2016, blasting through the benchmark (MSCI World (EUR) (NR)) which came in at 10.73%. Over a three- and five-year view it has returned 18.62% and 16.72% respectively (benchmark: 13.47% and 15.09%). “Mankind is facing some major social, ecological and economic challenges, such as climate change and scarcity of resources,” LGT says. “However, challenges also bring opportunities, which is where our sustainability funds come in.” The fund is an actively managed equity portfolio which primarily invests in companies operating around the globe.

US SRI firm Pax World Management has launched the Pax ESG Beta Dividend Fund (PAXDX), subadvised by smart beta specialist Aperio Group. The fund is designed to consistently overweight a US large cap portfolio toward stocks with stronger ESG profiles, higher dividend yield, and higher quality investment fundamentals that may support future dividend payments. It’s Pax’s second smart beta strategy, following the launch of the Pax ESG Beta Quality Fund in June 2016.

A £400m fund has been created by the British Business Bank to boost economic growth in the North of England. The Northern Powerhouse Investment Fund will offer small businesses in the region “a greater choice of funding” – via microfinance, business loans and equity investments – in a bid to unlock innovation and entrepreneurship. It is backed by £184m from the European Investment Bank.

Candriam Investors Group, the former Dexia Asset Management that is part of New York Life, is reportedly planning to reorganise and rework three SRI-focused funds into a single structure. The funds affected, Citywire said, are the Candriam Equities L Sustainable World, Candriam Equities L Sustainable Emerging Markets and Candriam Equities L Sustainable EMU funds. The newly merged Candriam SRI Equity World fund would be managed by Bart Goosens, the report added while Jan Boudewijns would run the Candriam SRI Equity Emerging Markets offering. And the Candriam SRI Equity EMU fund will be run by Laurent Milliat.

Investment funds Zoma Capital and Encourage Capital have reportedly launched the first-ever sustainable seafood investment holding company, named Pescador (Spanish for fisherman). Its investment strategy, which will aim to recover the economic value that is lost due to poor fisheries management and restore ocean ecosytems, was developed through research funded by Bloomberg Philanthropies and the Rockefeller Foundation as part of the Vibrant Oceans Initiative. Pescador Holdings will start with an initial $10m commitment from Zoma Capital.AXA Investment Management is to launch a gender-lens fund, reports Citywire Selector. The fund, the AXA World Funds Mix IN Perspective fund, will hold companies demonstrating evidence of gender diversity and positive social impact around diversity and inclusion. The new fund will be run by AXA portfolio manager Julie Lamirel.

Columbia Threadneedle Investments, the funds arm of Ameriprise Financial, has been appointed by Zurich Germany to manage its new European equity ESG strategy. The strategy is managed by Senior Portfolio Manager Ann Steele. Meanwhile, Columbia Threadneedle’s UK Social Bond Fund is celebrating its third anniversary; having outperformed the benchmark and delivering 6.6% annualised returns to investors. “The Fund’s three-year milestone dispels the myth that investors need to sacrifice performance to achieve social impact,” it said. Government minister Rob Wilson said: “Columbia Threadneedle and Big Issue Invest are pioneers in this area and a fantastic example of how investors can achieve strong returns whilst also delivering positive social outcomes.”

UK-based social impact investor Bridges Ventures plans to raise £150m for its fourth sustainable growth fund, according to Private Equity News. The fund will make investments between £2m and £20m into SMEs. Last month, Bridges launched a $25m real estate fund focused on urban areas that need revitalization. The fund, Bridges UrbanView will be led by Rachel Diller, who was most recently Managing Director at Goldman Sachs’ Urban Investment Group.

The Danish government has received backing to the tune of DKK500m (€67m) from four of the country’s biggest pension funds – ATP, PKA, PensionDanmark and Industriens Pension – for a new fund aimed at helping the domestic farming industry. The funds have committed DKK125bn each to Danish Agricultural Capital (Dansk Landbrugskapital), which will lend to established farmers in Denmark, many with high debt levels, with a view to boosting employment and increasing agricultural effectiveness and efficiency. The Danish Ministry for Industry, Business and Financial Affairs has launched the vehicle, and will invest a further DKK500m alongside the four commitments. Lending will begin imminently, and will take the form of non-callable subordinated loans, meaning they will be treated more like equity by many banks and mortgage providers.

The TriLinc Global Impact Fund has awarded a sub-advisory contract to investment manager TransAsia Private Capital, covering its impact investments in Southeast Asia. The role will involve advising on term loans for business expansion and socio-economic development in the region. TrilLinc specializes in providing growth-stage loans to trade finance to SMEs in developing markets. TransAsia is based in Hong Kong and will focus on longer-dated opportunities in Indonesia, Malaysia, Philippines, Cambodia, and Thailand.