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Responsible Funds, March 1: Germany’s Union Investment eyes doubling sustainable funds AUM

The round-up of responsible funds news

Citing growing retail and institutional demand, Union Investment, the asset manager for German co-operative banks, says it could double its sustainable funds under management by 2017. At the end of 2012, Union managed €5.8bn in sustainable funds, up €1.3bn from a year earlier. “After the growth we saw last year, I can easily imagine doubling our sustainable volume in the next three to four years,” Alexander Schindler, board executive at Union and head of its institutional business, told a news conference in Frankfurt. The €1.3bn included €1bn in inflows and €300m in market gains.

Deutsche Bank says it has already invested £2m of its £10m Impact Investment Fund to support the social enterprise market in the UK. Launched in November 2011, the fund’s first two investments are with Big Issue Social Enterprise Investment Fund L.P. and Bridges Ventures III. Deutsche says: “With a growing pipeline, the bank is on target to fully invest the fund within three years.” The fund is managed by Deirdre Davies, a Director in the bank’s private equity’s arm.

The €184.8m SAM Sustainable Healthy Living Fund, which invests in the sustainable potential of the healthy living market, beat its MSCI World Equity Index by 0.5% in January. The largest holdings are in Mead Johnson Nutrition, GNC Holdings and WhiteWave Foods, all of the US.

Marechale Capital’s AD (Anaerobic Digestion) Renewable Energy Fund, which concentrates on small scale, anaerobic digestion plants which benefit from attractive government incentives, has been listed on the Kuber Ventures UK-based multi-manager platform for Enterprise Investment Scheme (EIS) portfolios. Marechale is 13.8%-owned by Investec Asset Management Limited while Kuber is backed by private equity firm LW². Other funds on the platform include the Old Burlington Investments Renewable Energy Fund.The $15m Jupiter China Sustainable Growth fund managed by Philip Ehrmann has returned 20.4% in the year to the end of January, against a benchmark (MSCI Zhong Hua Index) return of 18.3%. The fund, which launched in December 2009, invests in firms that are “positioned to benefit from trends associated with the environmentally, socially and economically sustainable development of Greater China”. The fund has 47 holdings in total, the largest being Tencent, China Construction Bank and the Industrial & Commercial Bank of China. It is a sub-fund of the Jupiter Global Fund SICAV.

CDC, the UK’s development finance institution, has announced a US$40m investment in what will be one of Africa’s largest fertiliser production plants. It said the loan to Indorama Eleme Fertilizer & Chemicals Limited in Port Harcourt, Nigeria would build a business that can become a major job creator in the region. It would also “contribute to improved farm yields and agricultural productivity”. The investment is the first direct long term loan made by CDC in over a decade and reflects the policy under its new strategy, announced in September 2012 that means that CDC can now provide debt and direct investment to businesses as well as acting as a fund-of-funds investor.

Indices

Environmental, social and governance research firm Sustainalytics has announced that Toronto-listed MEG Energy Corp has been added to the Jantzi Social Index. “The company uses co-generation technology to increase operational efficiency and reduce greenhouse gas emissions at its oil sands facility,” it says.