Responsible Funds, March 2: Lombard Odier adds to ESG funds with long-short strategy

The latest responsible funds news

A long/short strategy with a sustainability focus will be launched by Lombard Odier Investment Managers in coming months, and already has $100m in committed capital. Arnaud Langlois, who has joined Lombard Odier as a Portfolio Manager, will launch the fund, together with recently-appointed Senior Analyst Cyrus Azarmgin.

Deutsche Asset Management has renamed its €195m Multi-Opportunity-III fund the ESG Multi-Asset Dynamic Fund. The vehicle, seeded in 2005 by a family office, will be the first product under Deutsche Asset Management’s new DWS brand, which is expected to IPO this month. It was not originally created as an ESG fund, but manager Gunnar Friede told RI that holdings had only needed to be marginally changed to make it compliant with the firm’s ESG standards. There are now seven funds under Deutsche’s ‘ESG’ banner, including a €2bn bond fund, which the firm also ‘rebranded’ from a mainstream vehicle earlier this year.

BlackRock Real Assets, through its Kingfisher partnership with Lightsource BP, has agreed to acquire 13.5MW of UK solar assets from CTF Solar, in a deal worth £15m. Lightsource BP will be responsible for the management and long-term maintenance of the three solar projects, located in Scotland, Leicestershire and Gloucestershire.

There is a correlation between shareholder votes and trading activity, a recently released paper has found based on mutual fund-level analysis. Funds that voted against management on a proposal or on say-on-pay were more likely to decrease their holdings in the company between proxy filings and meeting date. However, the analysis also showed that funds update trading patterns once the vote outcome is known. For example, a fund which votes against management on say-on-pay, but observes that management still receive significant support from other shareholders is less likely to sell stock. Conversely, it is more likely to sell stock if it votes in favour of say-on-pay but observes that management do not receive support from other shareholders.

Global impact investment firm LeapFrog Investment has successfully built and exited Ghanaian pension provider Petra Trust, according to LeapFrog’s website. The three-year investment enabled the trust to scale rapidly to become Ghana’s largest independent pensions trustee. Petra has reported 76% average annual revenue growth since 2014, currently holding $310m in AUM and reaching 2.4 million Ghanaians. The impact investment firm sold its full stake in Petra to Capital Alliance Private Equity IV Limited, a fund managed by investment firm African Capital Alliance.The British Business Bank (“BBB”) has launched up to £100m of equity funding for small- and medium-sized businesses in the East and South-East Midlands. The investment is part of a £250m Midlands Engine Investment Fund, and Foresight Group, the London-based infrastructure and private equity house, has been appointed fund manager.

UK-based renewables fund Bluefield Solar has reported a net asset value increase from 110.49pps to 112.40pps over the six months ending December 2017, according to its latest “report“ The fund, which invests in UK-based solar assets, delivered underlying earnings of £13m over the same period.

A new fund has been announced which aims to drive innovation in the aid sector, particularly in the world’s most dangerous conflict zones. The Humanitarian Grand Challenge fund is the latest in a series of Grand Challenge funds, which have previously received backing from the Gates Foundation. This most recent addition is a collaboration between the UK and the US governments, which will provide grants to fund projects focused on developing new ways to deliver water, sanitation, energy, health assistance and life-saving information in hard to reach conflict zones.

John Laing Environmental Assets (JLEN), a Guernsey-based renewables investment company, is reportedly aiming to raise £30m in equity to refinance a credit facility used for investments in the biomass and anaerobic digestion sectors. This is the first round of a programme that could see it issue up to 200 million shares over the next 12 months.

The UK’s Department for International Development (DFID) has reportedly announced that it will be investing £25m over a 20-year period in the Natural Disaster Fund. Under the G7 Climate Risk Insurance Initiative, member countries aim to increase the number of people in developing countries insured against climate change and related hazards to 40m by 2020.The fund is managed by Global Parametrics, a for-profit, social venture which develops markets for Financial Disaster Risk Management (FDRM) solutions in low and middle income countries.

Reporting Khalid Azizuddin and Ella Milburn