Responsible Funds, July 24: Harvard Management Co., RSF Social Finance, Marguerite Fund, MassPRIM

The round-up of the latest responsible funds news

The Harvard Management Company (HMC), which runs the university’s $36.4bn (€33.3bn) endowment, has sold its holdings in Romanian timber (33,600 acres) to the Swedish furniture retailer IKEA, the Boston Globe reports. Harvard announced in late 2013 that it was looking to sell the holdings. This coincided with revelations that the Managing Director of Scolopax, an HMC affiliate in Romania, was indicted on charges of taking $1.3m of bribes. Though he denied any wrongdoing, the Globe said the firm’s ex-MD Dragos Lipan Secu was ultimately convicted. At the time of 2013 announcement, HMC’s timber holdings in Romania were said to be worth $116m.

RSF Social Finance, a US firm specialising in social finance, says it has acquired $9m (€8.2m) in bonds issued by solar power firm SolarCity. “The solar bonds provide an opportunity for RSF to earn an attractive financial return (2.6% per annum) while helping SolarCity expand its use of the sun’s clean energy to reduce our society’s dependence on fossil fuels for power generation,” said Joe Avenatti, Senior Director of investments at RSF. Since its launch in 1984, San Francisco-based RSF has provided more than $405m worth of loans and grants to social enterprises. Announcement

The €710m European Fund for Energy, Climate Change, known as the Marguerite Fund, has refinanced a €107m loan for a 36MW photovoltaic (PV) project near Auxerre, France, Environmental Finance (EF) reports. Citing Marguerite sources, EF said the terms of the refinancing included pricing and repayment conditions that “reflect the improved lending market conditions and excellent performance track record of the asset.” No further details on the move were given. Created to support the European Commission’s efforts to expand renewable energy in the EU, the Marguerite Fund is backed by the European Investment Bank and development banks from five EU Member States.

Representatives of beneficiaries covered by the $62.3bn (€57.2bn) Massachusetts’ state pension scheme have written a letter to the scheme’s board, urging consideration of fossil fuel divestment due to the risks that the sector poses. Among the representatives that signed the letter, a copy of which was obtained by the Boston Globe, were the Service Employees International Union (SEIU), Local 509; two teacher groups; and the Massachusetts Nurses Association. The representatives write: “We believe the board has a fiduciary duty to incorporate climate change concerns into its investment policy in the interest of not only pension beneficiaries, but also taxpayers who indirectly contribute to the pension system.” MassPRIM, the scheme’s asset manager, has an estimated $1.4bn invested in the fossil fuel sector.Clean Fund, a California-based firm that provides finance for the renovation of commercial and residential properties, says it has taken in $60m (€54.7m) from venture capital firms and an unnamed asset manager. Clean Fund said the fresh capital would help it further expand its so-called ‘PACE’ program. Under Pace, the firm provides finance for renovation of commercial properties to make them more energy efficient and environmentally friendly. Said Greg Saunders, the company’s CEO: “The funding is strategic in many ways, providing a dynamic and flexible foundation that positions the Company to originate hundreds of millions in commercial PACE projects in the coming years.”

The European investment Bank (EIB) has approved an undisclosed investment in a €200m renewable energy fund, Capenergie 3, from Omnes Capital. It’s an infrastructure fund dedicated to renewable energy projects in Europe and will “invest in small to medium-sized assets, with a view to aggregating these investments into larger portfolios”. The EIB also said Omnes would have to comply with the bank’s environmental and social standards when investing. Omnes, which also specialises in private equity, has €2.1bn in assets under management.

Staying with the EIB, the bank says it’s also considering whether to invest €43m in Impax Asset Management’s ‘Climate Property Fund II.’ The Impax fund invests in existing buildings like offices in the UK that are in need of rehabilitation and energy efficiency upgrading. Once the buildings are overhauled, the fund puts them up for sale. According to the EIB, the €781m property fund offers “environmental benefits by supporting projects that reduce energy consumption and helps mitigate climate change.”

The Inter-American Development Bank (IDB) has approved a new $5m (€4.5m) ‘Climate-Smart Agriculture Fund’ (CSAF) that will invest in Latin America and the Caribbean. According to the IDB, the CSAF will focus its investments on sustainable land use – including reforestation – as well as “climate-resilient agribusiness.” Said Kelle Bevine of the IDB’s Corporate Finance Department: “Our efforts thus far have produced solid results on climate mitigation in the regions. This new initiative complements those achievements with a first-of-its-kind fund to pursue equally ambitious results on climate adaptation.”