Responsible Funds, Jan. 30: PGGM and Legal & General in €500m ESG-heavy real estate tie

Legal & General Capital and Dutch pension fund manager PGGM have launched a London office joint venture partnership with a focus on impact investment. The tie-up will look to integrate material environmental, social and governance (ESG) aspects throughout its assets, “in turn realising a strong ESG performance”. It has also completed its first £67m investment – 72 Broadwick Street in London’s Soho area. The joint venture initially has an allocation of circa £375m (€500m) to invest. Mathieu Elshout, Senior Investment Manager at PGGM commented: “As a responsible investor we believe that we have an obligation to contribute to a sustainable world. We can do so via impact investment, or investing in solutions, as we call it. We strongly believe that ESG factors have a material impact on the financial performance of our real estate portfolios and that this will continue to grow over time.”

Legal & General Group separately announced a new regeneration vehicle to provide investment into UK regeneration projects including housing and infrastructure. L&G is allocating £1.5bn to the vehicle, and working alongside investment partners plans to secure further external funding up to £15bn. The fund will invest across the UK in both equity and debt. It will take construction risk and invest in different sectors and projects: a fund of that size could be involved in circa 30 to 50 projects.

Fund firm Colonial First State Global Asset Management says it has made a successful final close for the European Diversified Infrastructure Fund. It said it achieved its objective of A$2.9bn (€2bn) in total commitments. It said a “key factor” was the team’s integration of environmental, social and governance (‘ESG’) policies and practices within each business. “We have always targeted lead or co-lead roles to ensure we have board representation and voting rights on all decisions including the implementation of ESG principles,” said Niall Mills, Partner, Direct Infrastructure Europe. The fund’s investor base is made up of 49 institutional investors, mostly pension funds and insurance companies.

Dozens of individual investors committed €15m to back “Nature Conservation Notes”, a new conservation investment product from Swiss bank Credit Suisse, according to a Huffington Post report. It said the projects financed by the notes have been selected by the Luxembourg-based Althelia Climate Fund. Althelia announced the sale as part of the close of a wider €105m sale, mostly from bodies such as the European Investment Bank, the Dutch development bank FMO, FinnFund in Finland and the Church of Sweden, as well as the David and Lucile Packard Foundation, the report added.

TAM Ethical, the London-based investment management firm, has launched a new ISA [individual savings account] offer for ethical investors. For every new ISA opened within the Ethical product range between January 1 2015 and January 5 2016 investors won’t have to pay an annual management charge for the first full year, it said.The Energy Champions Fund managed by Independent Capital Group, the Swiss asset management and investment advisory firm that specialises in what it terms ‘Pragmatic Sustainable Investing’, has become the first fund to receive South Pole Carbon’s label as a Climate Impact Transparent Investment. The fund invests in energy companies (traditional/non-traditional energy) and integrates sustainability criteria in the investment process. “Based on the analysis of South Pole Carbon (the company which did the analysis for the Norwegian sovereign wealth fund and KLP) we are proud to mention that the fund’s invested companies produce approx. 30% less CO2 emissions than the benchmark,” CEO Mirjam Staub-Bisang told RI.

New Zealand finance group Grosvenor Financial Services Group has announced it has removed exposure to all directly-held fossil fuel-related companies within the two Socially Responsible Investment (SRI) fund options in its KiwiSaver Scheme. KiwiSaver is the country’s voluntary long-term savings scheme. Chief Investment Officer David Beattie said the changes reflected both developing trends in the SRI investment world and feedback from members of its SRI funds. “The global investment industry has had an increased focus on both responsible and ethical investing, and many of our SRI members have told us that fossil fuel investment is among their primary concerns,” Beattie said. The new fossil fuels exclusion resulted in the removal last year of 17 companies from the SRI funds.

Swiss banking giant UBS is sponsoring social impact investment specialist Resonance to develop social investment tax relief (SITR) funds across cities in the UK. The first SITR fund aims to launch in Bristol in the first quarter of 2015. Each SITR fund will launch with around £5m to investment in social enterprises. The plan is now to grow £30m+ of SITR Funds in cities across the UK over the next 2-3 years and more if Brussels approves plans to extend the scope of SITR. Link

It’s emerged that star fund manager Neil Woodford has taken a 10% stake in Crystal Amber, the activist UK fund manager, via his the CF Woodford Equity Income vehicle. It follows a placing of £32.3m worth of shares this week by the Guernsey-based fund which buys stakes in companies and presses for change. Other significant shareholders, according to the report, include Woodford’s former firm Invesco Perpetual, with 23%, and Baring Asset Management, Aviva Investors and Rathbone Investment Management.

Bridges Ventures, the UK-based social investment specialist, is reportedly raising a US-focused fund. Dow Jones’ Private Equity News arm said the move follows six months of “expanding its brand” in the country. Bridges declined to comment to Responsible Investor, citing US disclosure rules. Bridges’ own website links to a recent New York Times article featuring Brian Trelstad, its partner focusing on its US operations.

Separately, Bridges recently announced the sale of three care homes to Legal & General Property on behalf of its Legal & General UK Property Fund. They were run by its CarePlaces Fund, the specialist healthcare property fund managed in partnership with care home developer Castleoak. “Purchased for a total consideration of £25.2m, the deal represents a net initial yield of 5.5%,” Bridges said. The sale represents the first realisations from Careplaces, which was established in 2011 to focus specifically on building a portfolio of pre-let care home investments.