Responsible Funds, July 28: Australian Ethical gets boost as institutional inflow lifts AUM

The latest responsible funds news.

Sydney-based funds house Australian Ethical increased its assets under management by 8.7% to A$2.1bn (€1.4bn) for the quarter ended June 30 – up from A$1.9bn at the end of March. “In addition, on 5 July 2017 the business received an inflow of A$128m from an institutional investor which represented an increase of 6% of FUM as at 30 June 2017,” the listed company said in a regulatory filing.

The Australian Catholic University (ACU) has raised A$200m from what it says are “some of Australasia’s biggest institutional investors” for what’s claimed to be the first Sustainability Bonds in the country. The bonds had a second party opinion from Sustainalytics and assurance by KPMG. ACU says the proceeds will go towards financing and refinancing its teaching and research expenditures in areas including education and healthcare and green property projects which are in alignment with the International Capital Market Association’s Sustainability Bond Guidelines. Investors will receive coupon payments equivalent to 3.7% semi-annually for a period of 10 years.

Blackrock has teamed up with UK solar firm, Lightsource to create £1bn portfolio of solar power assets in Britain over the next three years, Reuters reports. BlackRock’s Head of Renewable Power for Europe, Rory O’Connor, said the market “continues to present attractive opportunities for institutional investors”. The partnership, called Kingfisher, will initially include 25 of Lightsource’s British solar assets with a combined capacity of 156 megawatts.

Pensioenfonds Metaal en Techniek, the €70bn Dutch pension fund for metal and technical workers, will reportedly introduce its own ESG focused bespoke equity benchmark at the end of the year. The aim of the index is to better integrate ESG considerations – without harming returns – and select companies with operations and activities that conform with the fund’s long-term investment principles.

A $10m African Young Entrepreneurs Fund has been launched by Jack Ma, Founder and Chairman of Alibaba, the Chinese online retailer. The fund, launched at the Youth Connekt Africa Summit co-hosted by the United Nations Conference on Trade and Development and the Government of Rwanda, will be dedicated to supporting African online businesses. Ma is Special Adviser to UNCTAD.

Betterment, the US independent online ‘robo advisor’, has announced its socially responsible investing portfolio strategy, which aims to maintain a diversified, low-fee approach whilst increasing exposure to companies that meet its SRI criteria. In May, the $10bn manager announced the appointment of Judy Mares to its Board of Advisors. Mares, a former Deputy Assistant Secretary for Policy in the Employee Benefits Security Administration of the US Department of Labor, was a member of the leadership team developing the Fiduciary Rule, the Department’s guidance on ESG Investing, and Shareholder Engagement among other products.

German’s transport minister Alexander Dobrindt has announced plans for a fund to help cities modernize their transport systems and reduce pollution, according to a Reuters report. It said the fund would provide hundreds of millions of euros and would help cities to better manage their traffic flows, though it quoted him saying it was too soon to bury the internal combustion engine.EdenTree’s UK Equity Growth fund was found to be 74% less carbon intensive than its FTSE All Share benchmark, according to the firm’s 2nd annual carbon foot-printing report. This trend of beating the benchmark was repeated across the UK investment manager’s Amity equity funds, according to the study which aimed to provide better understanding of the “environmental impact and climate risks within its portfolios”.

Dutch pension investment giant APG and Robeco parent ORIX are teaming up to bid for Singapore-based renewable energy firm Equis Energy. Reuters, citing unnamed sources, reported that other potential bidders for Equis, which owns 97 projects across Asia, include Shell, SoftBank and I Squared.

Greencoat Renewables has raised €270m through its initial public offering on the Irish Stock Exchange’s (ISE) Enterprise Securities Market (ESM). The Irish renewable energy company aims to use the capital to build a portfolio of operating renewable electricity generation assets throughout the Eurozone but will initially look within Ireland to invest before expanding out.

UK asset managers predict climate change related risks will significantly impact the valuation of oil and gas firms in the next 3-5 years, according to a new report by the Climate Change Collaboration. The survey of 25 asset managers – of which 13 responded – found that despite growing interest from investors in fossil fuel free products, most asset managers still do not see enough demand from clients to expand their product portfolios to include them – with only one respondent currently offering a fossil free passive investment fund. The Climate Change Collaboration is a UK group comprised of four Sainsbury Family Charitable Trusts.

The Universities Superannuation Scheme, the UK’s fund for academics, says less than 5% of the assets invested in its new defined contribution offering have gone into ethical options. According to the fund’s new annual report, the new Investment Builder – launched in October 2016 – attracted a total of £99.2m as at the end of March, of which £4.5m has gone into six various ethical options. The bulk of assets, £91.4m, has gone into the USS Default Lifestyle Option components. USS’s total net assets grew to $60bn, returning 20.1% over the period – although the deficit widened to £12.6bn.

Ludgate Environmental Fund, the Jersey domiciled resource efficiency fund, has been removed from the Alternative Investment Market (AIM) of the London Stock Exchange at the company’s own request. The fund, whose values has plummeted in recent years, was subject to an offer by private equity firm Headway Investment Partners in January 2017. Its current share price stands at 16.5 pence per share.

Environmental Defense Fund (EDF), the US-based non-profit environmental advocacy group, has been named one of The Nature Conservancy’s winners in its Conservation Investment Accelerator competition. The competition, which awards the “most meaningful work in the field of conservation investment”, awarded EDF the accolade for its coastal restoration and resiliency efforts in the US State of Louisiana. The other winners include: Terras App Solutions of Brazil, The Nature Conservancy’s Washington State program, and The Nature Conservancy’s Mexico program.