Responsible Funds, May 11: Montanaro impact fund names Michael Sheren, Mark Chaloner and Tina Rönnholm as advisors

The latest ESG fund launches and market news, bite-sized.

Representatives from the Bank of England and AP1 are among those named on the Advisory Committee of a new impact investing fund from London-based asset manager Montanaro. The Better World Fund will invest in global small- and mid-cap firms that generate more than half their revenues from providing products and services that contribute to achieving the SDGs. Launched last month, it has so far secured £110m, including backing from an undisclosed “large institution in the UK”, RI understands; and will shortly begin active fundraising. Ahead of that, it has appointed an Advisory Committee including Michael Sheren, Senior Advisor to the Bank of England’s Prudential Regulation Authority and Co-Chair of the G20’s Sustainable Finance Study Group; Tina Rönnholm, Portfolio Manager and ESG specialist at AP1; Fran van Dijk Fran, founding member of sustainability consultant One Stone Advisors, Board Member of the Scottish Environment Protection Agency and Chair of environmental charity Macaulay Development Trust; and Mark Chaloner, whose former roles include Director of the PRI, Chief Investment Officer at the Church Commissioner for England and Head of Investments at the West Midlands Pension Fund. “The Committee will initially consist of four independent members who will provide Montanaro with valuable expertise in Sustainability leadership,” the firm said in a statement. The fund is available in Sterling or Euro, with an introductory management fee of 0.5%, and an ongoing charge of 0.67%.
KKR is reportedly setting up a business to invest in companies with social and environmental significance, marking the buyout firm’s entry into impact investment. KKR’s new subsidiary, named KKR Global Impact Fund according to Luxembourg registry documents, will primarily look at medium-sized companies working on renewable energy, education and environmental management. According to sources, the fund will make private equity investments with the aim of developing business and making profits from future sales.
Listed wind farm fund Greencoat UK Wind has exercised an option to increase its stake in Clyde Wind Farms to 28%, at a cost of £114m. The purchase – on 30 May – will be financed through the issuing of new ordinary shares in Greencoat to institutional investors, which expected to raise up to £118m. UK based GLIL Infrastructure LLP will also exercise its option to increase its shareholding in the Scotland based wind farm to 22%.Merrill Lynch Wealth Management has launched five new retail-focused portfolios incorporating ESG factors, with a range of profiles based on investors’ risk appetite. The new CIO Core Impact Portfolios consist of mainly exchange-traded funds (ETFs) and require a minimum investment of $5,000. According to the company, the portfolios were launched “in response to growing demand for investments with the potential to produce positive societal outcomes without sacrificing financial returns”.
BNP Paribas Asset Management’s Shanghai-based arm reportedly plans to launch a new ESG fund after being granted a licence to raise money from China based institutional and high net worth investors for offshore investments. It’s understood that BNP Paribas Overseas Investment Fund Management (Shanghai) Co., which is designated as a wholly foreign-owned enterprise, has been given a quota of $50m to invest following the award of the Qualified Domestic Limited Partner (QDLP) licence. The QDLP was reinstated this year after a two-year hiatus following Chinese Government concerns over capital outflows.
A new ESG-tilted blockchain fund has reportedly been launched by a team that includes three former BlackRock analysts. Eterna Capital, a €20m venture capital fund, will invest in emerging blockchain companies that are also creating positive ESG impact and claims to use United Nations’ Sustainability Development Goals as its benchmark. Asim Ahmad, Mattia Mrvosevic, and Nassim Olive, who were all part of BlacRock’s institutional client business, left the asset management giant to join the venture capital fund headed up by chief executive Andrea Bonaceto.
The Parnassus Fund, an ESG strategy launched in 1984 by US specialist investor Parnassus, will now be managed exclusively by Robert Klaber and Ian Sexsmith, with current co-manager Jerome Dodson stepping down to focus on two other funds from the asset manager. The flagship fund, which has been fossil fuel-free since 2015, invests in US multi-cap equities, using an ESG lens. Parnassus gave no reason for the change in personnel. At 5 May, average total returns for the fund for the year-to-date were -4.2%, compared with 2.51% for S&P500.