Responsible Funds, June 23: La Française-Inflection Point launch listed real estate fund

The latest responsible funds news.

Inflection Point Capital Management is the investment advisor for a new listed real estate securities fund launched by sister firm La Française Forum Securities (LFFS). LFFS has been managing listed real estate securities for more than 15 years and IPCM founder Matthew Kiernan told RI: “Our partners at Groupe La Française, who have over €15 billion in real estate assets under management, have seeded the new strategy with €20m.” He said the investment thesis underpinning the strategy is that real estate companies whose underlying properties are more “eco-efficient” than those of their competitors will tend to out-perform in the medium and long term – with more rental and resale pricing power, greater tenant satisfaction and retention and lower energy costs. Kiernan said a 10-year back-test of the strategy demonstrates an annual “sustainability premium” of around 340 basis points. There was also a “climate dividend” as the companies selected for the portfolio have lower than benchmark emissions. The new vehicle is a sub-fund of the Luxembourg SICAV La Française LUX.

France’s Le Fonds de Réserve pour les Retraites (FRR) and Ircantec are among investors backing the €245m final close of Omnes Capital’s Capenergie 3 fund, which is focused on European renewable energy infrastructure investments. Investors included the European Investment Bank, La Banque Postale, CRPN, PRO BTP, SWEN Capital Partners and several Crédit Agricole Group entities. The new fund follows in the footsteps of the successful Capenergie 1 and Capenergie 2 funds, which raised €109 million in 2006 and €145 million in 2010 respectively.

Shareholders of Phaunos Timber Fund have reportedly voted against the continuation of the £237m Guernsey-based investment company for another five years at its annual general meeting. This comes after a campaign by Hong Kong activist investor LIM Advisors, owner of 11% of the fund’s share capital, to wind-up operations amid concerns over poor returns and discounted shares. An extraordinary general meeting will be held no later than 19 October to discuss the cessation process.

The first project in Sweden financed by the European Investment Bank (EIB) under its European Fund for Strategic Investments (EFSI) – a central pillar of the European Commission’s Investment Plan for Europe – has been inaugurated at a public event. The Långmarken wind farm in Kristinehamn consists of eight Vesta turbines, six of which were acquired by the EIB and Mirova-Eurofideme 3, a renewable energy fund managed by French SRI firm Mirova.

The Liverpool and Wirral Social Stock Exchange, a sister organisation to the UK Social Stock Exchange, has announced its third listing since setting up last year. Videregen is a clinical stage regenerative medicine company developing personalised organ replacements. It joins Rezatec, a geo-spatial data tech company and Acrobat Carbon Services, a funding partner to energy companies.

Social Finance US has launched the first pay for success project focused on refugee employment. The Massachusetts Pathways to Economic Advancement Pay for Success Project will support 2000 immigrants and refugees in Greater Boston to transition to employment and higher education. Social Finance raised $12.43 million from 40 impact investors. Prudential Financial, Inc., in collaboration with Maycomb Capital, provided nearly 50% of the total investment capital. Bank of America Merrill Lynch served as the placement agent for certain qualified high net worth and institutional investors. Link*Insurance and asset management giant Aviva* is reportedly divesting its entire tobacco holdings – a reported £1bn. The divestment will apply to the securities that Aviva manages on behalf of its shareholders and not to its third-party investments. Axa, the Irish sovereign wealth fund, and French reinsurer SCOR have all also committed to exiting from tobacco in recent years. Pressure group Tobacco Free Portfolios estimates that the total sum divested from the Tobacco industry to be $4bn.

Resonance, the UK’s social impact investment company, has published the first annual social impact report for its £2.1m Resonance Bristol SITR Fund. The fund, which is the first to use Social Investment Tax Relief (SITR) to build a portfolio of social enterprises investments in the region, has invested £900k into five projects. SITR is a UK Government backed scheme introduced several years ago which offers private investors a 30% tax break on eligible investments. 

Greencoat Renewables, an Irish green infrastructure firm, has announced plans to list on the London and Irish Stock Exchanges in a bid to raise €250m to expand its operations – potentially making it the first renewable energy infrastructure company to be listed on Irish Stock Exchange. Greencoat acquired a seed portfolio of operating Irish onshore wind farms in March 2017 with funding from Ireland’s National Treasury Management Agency and Allied Irish Banks.

US financial services giant TIAA has launched TIAA Personal Portfolio, a new online, professionally managed account. It offers a range of investment options, including passive, active and socially responsible, with five different risk levels, ranging from conservative to aggressive., the US-based non-profit developmental aid organisation co-founded by film star Matt Damon, has launched its WaterCredit Investment Fund 3 (WCIF3). The fund will invest in microfinance institutions and enterprises serving the water and sanitation needs of the poor. Focusing on India, Indonesia, Cambodia, and the Philippines the fund hopes to help provide safe water and sanitation solutions to 4.6m people over seven years. Link

UK-based Retail Charity Bonds has issued a new social housing bond on the London Stock Exchange. Proceeds will be loaned to Dolphin Square Charitable Foundation, a housing charity seeking to provide good quality housing for people on modest incomes who live or work in the City of Westminister. The Dolphin Square Charitable Foundation Retail Charity Bond is available to wholesale and retail investors and will pay a fixed rate of interest at 4.25% per annum until 6 July 2026, payable twice yearly on 6 January and 6 July of each year with the first coupon payment being made on 6 January 2018. The Bonds are expected to mature on 6 July 2026 with a final legal maturity on 6 July 2028. This is the fifth Retail Charity Bond to be launched by the Issuer.

SEDCO Capital, one of Saudi Arabia’s largest asset managers with $5bn under management, has launched a new Shariah-compliant, ethical investment strategy. The Prudential Ethical Investing strategy, which integrates ESG criteria into its investment process, favours long-term risk-adjusted returns. SEDCO Capital was the first Saudi asset manager to join the UN supported Principles for Responsible Investment.