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Responsible Funds, March 3: Norges, NEI Investments, Bridges name change, BlackRock, Palatine

The latest responsible funds news

Norges Bank Investment Management, the arm of the central bank that runs the Government Pension Fund Global, has said its environmental investments returned 12.4% last year. The investment giant made the statement in its annual report this week, saying it had NOK63.7bn (€7.2bn) in green holdings, spread across 226 companies. It also divested from 23 companies in 2016 on ESG grounds. The firm has three focus areas within ESG: children’s rights, climate change and water management. It declined to comment further, but said it will release a report dedicated to its responsible investment activities on Tuesday.

NEI Investments, the Canadian fund manager 50-50 owned by the Provincial Credit Union Centrals and the Desjardins Group, has terminated the sub-advisor of its C$200.1m (€141m) NEI Ethical Balanced Fund, Otterwood Capital. Otterwood was set up by high-profile fund manager Christine Hughes, known for her time at AGF Investments. Effective March 17, NEI said the fund would be managed in-house using a multi-manager approach that includes larger players QV Investors (C$14.8bn AUM) and Guardian Capital (C$27.3bn). NEI is also merging two other macro funds that are sub-advised by Otterwood into the NEI Northwest Tactical Yield Fund. NEI signed an “exclusive retail investment management agreement” with Hughes’ firm in 2012 hailing the “robust nature of her investment approach” and saying Otterwood was a “perfect match” for NEI. At the time of the appointment, the ethical fund’s investment strategies were adjusted to include greater flexibility between asset classes, the use of derivatives and the ability to engage in short-selling and invest in precious metals.

Palatine Private Equity, the Manchester-based lower middle market investor, has reportedly completed a £50m first close on a new Impact Investing Fund targeting £75m with a hard cap of £100m. The fund is a relatively rare combination of a mainstream private equity fund pushing social or environmental impact themes as a returns driver on a par with its other funds. Palatine is understood to be aiming for a final close in the first half of the year. The UK-wide fund is being led by Manchester partner Beth Houghton, who won the award for outstanding individual contribution to responsible investment in private equity at the BVCA (British Venture Capital Association) Responsible Investment Awards 2016, for which RI is the exclusive media partner.

The Church Pension Fund, a US independent financial services organisation that serves the Episcopal Church, with approximately $12bn in assets, has revealed that it served as an ‘anchor investor’ in the Developing World Markets’ $60.8m Off-Grid, Renewable and Climate Action (ORCA) Impact Note. Wespath Benefits and Investments, a general agency of The United Methodist Church, also invested $60m into the note, which will provide renewable energy finance loans to social businesses in the developing world.

The California Public Employees’ Retirement System (CalPERS) has posted a request for information bid on its website, ‘Global Equity ESG Research – Request for Information’, for CalPERS’s staff to research and assess public equity-based investment strategies that systematically incorporate ESG-related investment considerations.Bridges Fund Management is the new name for £800m (€929m) UK-based social investor Bridges Ventures as of today. Since 2002, Bridges has raised 12 funds across four different strategies. “We’re still committed to providing capital that makes a difference – in partnership with exceptional management teams, developers, mission-driven organisations and other investors who share our vision and values,” said Managing Partner & Co-Founder Philip Newborough.

Blackrock has acquired two ‘construction ready’ UK wind projects from developer REG Power Management. The funds titan has bought the 13MW Hallburn project in Cumbria, northwest England, and the 6MW Pen Bryn Oer wind farm in southeast Wales through its Renewable Income UK fund (RI-UK). The projects are reportedly supported by 20-year fixed price green certificates and will be operational by 2018. Link

Dubai Islamic Bank (DIB) has listed a $1bn Sukuk (Islamic bond) on the Nasdaq Dubai exchange. The listing, carried out under the DIB’s $5bn Sukuk Programme, represents the largest senior Sukuk issuance by a financial institution globally, and brings the total value of DIB’s current Sukuk listings on Nasdaq Dubai to $4.25bn, more than any other UAE issuer.

Natixis Global Asset Management has launched what it claims is the first target-date retirement savings solution focusing on environmental, social and governance (ESG) investing. The Natixis Sustainable Future Funds, which selects securities based on ESG criteria, includes 10 funds with vintages ranging every five years from 2015 to 2060.

And Natixis has announced the launch of the Mirova Global Green Bond Fund (MGGYX), a high-conviction fixed-income mutual fund that draws on the expertise of its responsible investment arm of the same name. The new offering will be co-managed by Chris Wigley and Marc Briand. Link

The San Francisco Housing Accelerator Fund, a non-profit fund financed by private and philanthropic capital, has been launched by San Francisco Mayor Edwin Lee. The fund aims to support affordable housing developers in a city with the highest rental costs in the US. The fund hopes to Leverage $10m in City investment and $7m in philanthropic investment with up to $30m in private dollars.

Franklin Templeton Investments Corp., the Canadian subsidiary of global funds firm Franklin Resources, has become an Associate Member of the Responsible Investment Association (RIA), Canada’s membership association for responsible investment.

Somerset Capital Management, a London-based boutique investment firm co-founded by Conservative MP Jacob Rees-Mogg, has reportedly launched an emerging market equity fund that excludes any investments in the tobacco industry. The MI Somerset Global Emerging Markets (ex-Tobacco) fund, seeded by a £49.5m investment from a UK charity, will follow the same investment strategy as the firm’s Global Emerging Markets strategy, which currently has $3.2 billion in assets under management.