Responsible Funds, January 15: BlackRock, NEI Investments, Woodford, East Capital, Wermuth

The round-up of the latest responsible funds news

BlackRock has launched a sustainable bond exchange-traded fund in response to growing demand for ESG investments. The iShares Euro Corporate Bond Sustainability Screened 0-3yr UCITS ETF (SUSE) tracks the Barclays MSCI Euro Corporate 0-3 year Sustainability ex-Controversial Weapons Index, which includes short-term Euro-denominated investment grade bonds issued by corporates with an ESG rating of BBB or above, as determined by MSCI. Companies are rated on 37 different ESG factors including carbon emissions. Additionally, the index excludes debt from companies that are involved with controversial weapons, including cluster bombs, land mines and chemical and biological weapons.

Toronto-based NEI Investments has launched the NEI Environmental Leaders Fund that will be sub-advised by Impax Asset Management. The fund will invest in environmental markets, including energy efficiency, renewable energy, water, infrastructure and sustainable food.

Wermuth Asset Management, a German family office with around $1bn (€917m) under management, has launched a second private equity fund that will target companies in the renewable and energy efficiency sectors. The intended size of Green Gateway 2 is €250m. Once the money is raised, Wermuth said it would invest between €5m and €30m in firms from the relevant sectors.

East Capital, which specialises in emerging and frontier markets, has announced its East Capital China Fund will adopt a thematic environmental strategy for China, and be renamed East Capital China Environmental. The fund will invest mainly in companies bringing sustainable development solutions to environmental challenges in China. The fund is managed by East Capital’s Chief Investment Officer and Partner Peter Elam Håkansson, supported by a local Hong Kong team led by François Perrin. Home page

UK-based Beckett Asset Management has launched an ethical investment strategy, the Social Impact Portfolio, that will be overseen by portfolio managers Craig Brown and Samantha Owen. The strategy will avoid investments with records of human rights issues, environmental abuse and animal testing.

Parvest Aqua, the new water fund from BNP Paribas whose management is delegated to Impax Asset Management, has been granted the LuxFLAG Environment Label for the first time, the Luxembourg fund labeling organization said. LuxFLAG added it has renewed the label for six Environment Investment Funds. They are: BNP Paribas Aqua; BNP Paribas Aqua L1 Equity World Aqua; Green for Growth Fund for Southeast Europe; Parvest Environmental Opportunities; Parvest Global Environment; and Parvest Green Tigers. Link*Neil Woodford, manager of the £801.4m (€1.1bn)* Woodford Patient Capital Trust, wants to raise more cash to invest in start-up companies, the Daily Mail reports. According to the newspaper, Woodford – a prominent name in UK fund management – would use the capital from investors to invest in another 30 firms. The trust currently invested in 60 listed and non-listed UK firms, the bulk of which are in the health care sector, the Daily Mail said. It quoted a UK fund manager as saying: “Neil Woodford believes there remain plenty of unexploited opportunities in early-growth businesses, including life science, healthcare, energy, utility, technology, industrial and consumer sectors.”

Community Capital Management, a fixed income impact investing manager, has said that its CRA Qualified Investment Funds Institutional Shares (CRANX) ranks among the top 1% of performers in the intermediate government category of 309 funds, as measured by fund tracker Morningstar for the one-year ending December 31 2015. CRANX returned 2.01% for the year, outperforming the category’s return of 0.49% and the benchmark’s return of 0.55%.

Big Issue Invest has closed a first tranche of fundraising commitments of over £21m (27.6m) into its Social Enterprise Investment Fund II (SEIF II), reports Pioneers Post. Investors into the fund include Joseph Rowntree Foundation, HSBC and Big Society Capital. SEIF II will invest in ‘businesses with ambitious social impact goals’ that can ‘deliver robust financial returns to investors’. Fundraising for SEIF II will continue with a goal of bringing the total fund size to £30m later in 2016.

Officials in the US city of Denver plan to release details of a $8.7m social impact bond to tackle homelessness. The Denver Post reports that investors into the social impact bond could earn back as much as $11.7m – including up to $3m in bonuses – or they could lose out on full repayment if the programmes does not meet measure outcomes.

Liontrust Asset Management, the London listed boutique with £4.7bn under management, has confirmed it is launching a water and agriculture fund in the first quarter of this year, subject to regulatory approval. The GF Global Water and Agriculture Fund will be launched along with its new UK Micro Cap Fund. “These two launches will continue our strategy of broadening and diversifying our offering of long only and alternatives funds,” it said. Link

The European Fund for Southeast Europe (EFSE) has loaned €15m to Turkey’s Finansbank to provide for 2000 loans for micro and SMEs, and rural clients in Turkey. The EFSE this week has also loaned €5m to Serbia’s Opportunity Bank to provide finance to micro and SMEs and low-income households in rural Serbia. The European Fund for Southeast Europe (EFSE) was initiated by KfW Development Bank (KfW) with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission.