Responsible Funds, May 1: US hedge fund’s Dublin-based UCITS vehicle goes fossil free

The round-up of the latest responsible funds news

Ardsley Partners, the $800m (€709m) Connecticut-based hedge fund group, says its Dublin-domiciled US Equity UCITS Fund aims to take advantage of increasing investor interest in the renewable energy sector and capture the “exceptional” growth opportunities presented by the shift towards non-carbon based renewable sources. Launched on the MontLake UCITS Platform in April 2014, the fund had focused on technology, telecoms, life sciences, traditional energy and renewable energy companies. “However as of April 2015, the fund’s portfolio will now be comprised of fossil-free companies solely within the renewables space,” it said. It will be managed in line with Ardsley’s existing Renewable Energy Fund, which was launched in 2006 and which has “substantially outperformed both its benchmark and the S&P”. The UCITS fund will be managed by Spencer Hempleman, who is taking over from founder Ardsley’s founder, Philip Hempleman.

Swedish bank SEB has launched a “green bond” fund for distribution to private and institutional investors in Germany. According to SEB, the fund will invest at least 70% of assets in green bonds, the proceeds of which are used to finance wind parks, water access, transport, ecological farming and waste management. SEB’s Green Bond Fund is domiciled in Luxembourg and starts with €12m in seed money. The manager of the fund is SEB Investment Management in Stockholm.

A new social investment fund aiming to support between five and 10 social enterprises in Scotland is being developed. SIS Community Capital has been developed by Social Investment Scotland, the social enterprise and charity that was set up in 2001 with funding from Scottish banks. “As one of the first social investment tax relief funds available to UK investors, SIS Community Capital will allow individuals to invest in a fund which provides tax relief but also helps to support the creation and growth of charities, community organisations and social enterprises that have the capability to make sustainable social and environmental impacts,” Edinburgh-based SIS said.

An investment vehicle that aims to alleviate drought and reduce forest fire risk through a pay-for-success/social impact bond model has won first prize in the 2015 Morgan Stanley Sustainable Investing Challenge. Blue Forest Conservation Notes was pitched by a team of students from the Haas School of Business at the University of California Berkeley at Morgan Stanley’s London headquarters. The Morgan Stanley Sustainable Investing Challenge is a collaboration between Kellogg School of Management at Northwester University, INSEAD Business School and the Morgan Stanley Institute for Sustainable Investing. 380 students from 78 schools in 20 different countries submitted proposals for the competition. Link

The New York City Pension Funds will formally consider diversity as a criterion in investment manager evaluation and selection, New York City Comptroller Scott Stringer has announced today (May 1). Stringer said: “The New York City Pension Funds intend to help set a standard and push the envelope for how pension funds and asset managers alike engage on diversity on a holistic level.” He said the “opportunities of tomorrow” wouldn’t be captured using yesterday’s business practices: “Diversity is a fiduciary duty and these funds are poised to prove that.”Zevin Asset Management, the US SRI firm, says its Global Appreciation non-taxable composite increased by 2.93% in the first quarter, while its Global Appreciation with Income composite increased by 2.25% (both net of fees). They both “outperformed their respective benchmarks even though we maintained a high cash balance throughout the quarter” said Zevin’s President, Sonia Kowal in an update for investors. She also mentioned successful shareholder activism during the quarter, such as withdrawing a shareholder resolution calling for a sustainability report at housebuilder Pulte Homes. Other withdrawn resolutions were at Home Depot (quantitative renewable energy goals) and ExxonMobil (executive compensation and sustainability performance).

The European Investment Bank (EIB) is considering putting around €15m into the Moringa fund, a private equity fund investing in agroforestry projects with high environmental and social benefits in Latin America and Sub-Saharan Africa. The fund, co-founded by Compagnie Benjamin de Rothschild, is targeting €100m for the vehicle which “leverages the fact that agroforestry is inherently a sustainable practice”.

Sonen Capital, the San Francisco-based impact investment firm that uses multi-manager strategies, says its Global Equity strategy returned 4.62% (net of all fees) vs. 3.84% for the MSCI ACWI Index in 2014, outperforming by 0.78%. Since inception, the strategy has returned an annualized 14.39% vs. 13.29% for the benchmark, an outperformance of 1.10%, net of all fees. During the year, Sonen supported 115 individual shareholder resolutions and co-filed six shareholder resolutions, it said in its new Impact Report. Companies targeted included Amazon, HD Supply, Google, Danaher and Thermo Fisher Scientific.

WHEB, the UK-based sustainable finance firm co-founded by environmentalist Ben Goldsmith, has released its first public impact report. It reveals WHEB’s infrastructure portfolio has generated estimated annual savings of nearly 74,000 tonnes of carbon dioxide through renewable energy projects. And it claims that an investment in the FP WHEB Sustainability Fund has a carbon footprint that is nearly 70% lower than an equivalent amount invested in the MSCI World Index.

ASX-listed alternative investment firm Blue Sky is targeting North American institutional investors with a new Australian agriculture offering, according to reports. FIN Alternatives, citing Michael Blakeney, Blue Sky Real Assets’ investment director, said Brisbane-based Blue Sky plans to invest in a diversified portfolio of real assets via three strategies: water rights, agricultural infrastructure and agribusiness expansion capital.