Responsible Funds, January 8: Danish pension funds back new agribusiness fund

The round-up of the latest responsible funds news

Danish pension schemes PKA and PensionDanmark have each invested DKK200m (€26.8m) in a new fund that seeks to invest in the production and distribution of food in developing countries. PKA said that the ‘Danish Agribusiness Fund (DAF)’ would invest in projects “from the farm to the table,” providing good returns for the scheme on the one hand and helping to feed people in developing countries on the other. The DAF has been seeded with a total of DKK700m. The figure includes the schemes’ investment as well as DKK212m from state-owned asset manager IFU and another DKK88m in development assistance. PKA, PensionDanmark and the IFU are also co-investors in the Danish Climate Investment Fund (DCIF) launched two years ago. Link (Danish)

Legal & General Capital has invested in clean energy investment and asset management business, NTR Wind Management Ltd, a subsidiary of NTR plc, and committed to build an onshore wind portfolio through the first close of a fund targeting €250m. The fund will build up to 270MW in capacity, which could generate sufficient electricity to power up to 170,000 homes and avoid more than 300,000 tonnes of CO2 per annum across the UK and Ireland. Announcement

Fund titan BlackRock has reportedly handed the running of its €100m World Agriculture fund to newly hired Skye Macpherson. Citywire Selector said Macpherson, who joined from rival First State in September 2015 to bolster its natural resources team, takes over from Desmond Cheung, who had run the fund since 2010. Macpherson would also serve as a co-manager on the BGF Natural Resources Growth & Income fund, the report added. Robin Batchelor left the team at the end of last year to pursue other opportunities.

Ontario’s C$$950m (€619m) Mennonite Savings and Credit Union (MSCU) has become the first Canadian financial institution to show that all of its Guaranteed Investment Certificates (GICs) qualify as Socially Responsible Investments (SRI). ESG firm Sustainalytics helped MSCU develop a set of socially responsible lending criteria to incorporate into its agricultural and commercial lending practices. GICs are a Canadian investment that offers a guaranteed rate of return over a fixed period of time.

Aquila Capital, the alternative investment firm, has increased its exposure to renewable energy in Scandinavia by agreeing a majority co-investment in Norway’s largest operational wind park, Midtfjellet. The shares have been purchased from the Norwegian utility company Energiselskapet Buskerud AS. This transaction increases Aquila Capital’s commitment to wind energy to an installed capacity of about 500 MW. Link

US asset manager Legg Mason has begun offering a sustainable US equity fund to retail investors in Germany and Austria. Launched last June by its affiliate ClearBridge, the fund is called ‘ClearBridge Sustainability Leaders’ and draws its constituents from the Russell 3000 index. According to ClearBridge, the 40 to 50 stocks ultimately selected for the fund are both undervalued and score highly on ESG (environment, social and governance) issues important to the manager. Based in New York, ClearBridge manages $2.8bn (€2.5bn) in ESG funds.The European Investment Bank (EIB), has increased the 0.500% Climate Awareness Bond (CAB) November 2023 by €500m, bringing the total amount outstanding to €1.5bn. Crédit Agricole SA was one of the main investors of the “tap”, in the context of its recent commitment to invest €2bn in high quality Green Bonds. EIB’s CABs have been awarded a Sustainability Bond Rating of ‘b+’ from Oekom, the ESG rating agency. This is the highest rating so far assigned by the agency. The transaction takes the total CAB issuance to €11.8bn.

The €196.1m F&C Responsible Global Equity Fund from BMO Global Asset Management returned 22.87% in the year to the end of November 2015 compared to a benchmark (MSCI World NR) return of 17.18%, according to a fund update. The fund, which aims to provide capital growth by investing in an ethically screened and diversified portfolio of global equities, is managed by Alice Evans and Jamie Jenkins. Its top three holdings are Apple, CVS Health Corp. and Mastercard.

The personal finance website Credio has unveiled a list of what it deems the 10 best and 10 worst performing US sustainable funds for each of the last three years. According to Credio, the $1.4bn (€1.28bn) ‘Parnassus Endeavour Fund’ was the best performer for the period, while the worst was the $33.4m ‘Ariel Discovery Fund.’ Parnassus, which invests in large cap stocks, returned 18.47% in each of the last three years, Credio’s data reflected. Ariel’s three-year annualised return, meanwhile, was -0.45%. Link

Germany’s sustainable Global Challenges Index (GCX) was up 14% last year, outperforming the country’s benchmark DAX index by three percentage points, reports the Hanover bourse, which runs the GCX together with Oekom Research, a sustainability rankings firm. The exchange also said that since inception in September 2007, the 50-member index had gained almost 96%. “The GCX’s continued success is confirmation of our belief that sustainability and performance are not mutually exclusive,” said Sandra Reich, Co-CEO of the exchange. Investment products based on the GCX, as well as a separate basket of sustainable corporate bonds known as Global Challenges Corporates (GCC), have taken in €330m from investors.

Finance Wales, an agency that helps to finance small and midsize enterprises (SMEs), plans to launch a second fund for that purpose this summer. “Procurement of the £136m (€182m) Wales Business Fund is in progress and we anticipate a launch by the end of June 2016,” an agency spokesman was quoted by Wales Online as saying. The fund replaces the £150m ‘Wales Jeremie Fund’ which is fully invested. According to the Wales Online, the new fund will place a greater emphasis on providing finance to start-up businesses and micro-businesses – that is those employing less than 10.

Triodos Vastgoedfonds, the real estate arm of the sustainable banking group, has named Cairn Real Estate as asset manager. Cairn will be responsible for the sales and purchases and asset and property management functions of the properties in the portfolio; it takes over from Bouwfonds Investment Management. CBRE continues as real estate manager. Link (Dutch)