Responsible Funds, May 20: Luxembourg’s LuxFLAG agency cuts costs for ESG label

The latest responsible funds developments

LuxFLAG, the Luxembourg Fund Labelling Agency, the body which labels responsible funds in the Grand Duchy, has cut the costs for applying for its ESG and Environment labels. Applicants will no longer need to pay upfront auditor fees as LuxFLAG will instead cover the cost. LuxFLAG has appointed KPMG Luxembourg for this process. The body says the new process will be more “efficient and standardized, favouring discipline and rigour”. LuxFLAG currently has nine funds each under both labels. The ESG label was launched in 2014 with the support of three European fund houses (OFI Asset Management, Nordea and Sparinvest) as the domicile sought to continue its focus on responsible investment. Finance Minister Pierre Gramegna, at launch, called the label a new tool to “encourage fund stakeholders to act responsibly and aim for the achievement of a better and sustainable future”. Home page

Swedish buffer fund AP2 has invested $30m in the Goldman Sachs and International Finance Corporation’s (IFC) Women Entrepreneurs Opportunity Facility. Launched in 2014, the first-of-its-kind $600m fund aims to spur lending in developing countries to women-owned SMEs and women entrepreneurs. To date, it has made over 20 commitments to banks in 14 countries, increasing lending to 25,000 women entrepreneurs in countries from China to the Democratic Republic of Congo to Brazil.

Impax Asset Management, the AIM-listed environmental asset manager, says its assets under management and advice have increased 26% since year-end to new peak of £3.6bn (€4.7bn) as at the end of its first-half. It saw net inflows of £300 million, predominantly from the US and Continental Europe. It was also having “encouraging discussions” with investors on raising new monies in real assets strategies. “Our investment hypothesis is clearly resonating with investors around the world,” said CEO Ian Simm. During the period, Sally Bridgeland, the former BP pensions head who joined the Impax’s board in 2015, took over as chair of the Audit & Risk Committee.

Capital Group, the US asset management giant, is to launch a UCITS version of its venerable flagship US equities strategy, Investment Company of America (ICA). Funds Europe said ICA was launched in 1934, and has returned an average of almost 13% a year since inception. The new Luxembourg-domiciled vehicle would follow the same investment approach as the parent fund.

Milan-based Oltre Venture, which describes itself as the first Italian impact investment fund, has become the first European Venture Capital Fund Manager (EuVECA) authorized in Italy. It has launched the Oltre II SICAF EuVECA that focuses on investments in social impact sectors such as health, social housing and agriculture.China-based car firm Geely Auto, maker of London’s iconic black cabs and owner of Swedish carmaker Volvo, has reportedly raised $400m in green bonds from investors to finance the development of an electric taxi. The Financial Times said it would help Geely develop the TX5, an aluminium-bodied hybrid vehicle to be built in Coventry, central England.

Robeco Groep, the Dutch fund firm controlled by Japan’s ORIX conglomerate, will separate its activities. Robeco Institutional Asset Management B.V will have its own Supervisory Board and executive management under the name Robeco, with its headquarters in Rotterdam. Meanwhile, Robeco Group will be transformed from an operating company into a financial holding company. The new corporate governance structure will further separate the holding activities of RG, and the asset management businesses of its subsidiaries: Boston Partners, Harbor Capital Advisors, Transtrend, RobecoSAM and Robeco. The new structure “reflects current global industry and market trends, guaranteeing continued expertise in investments, distribution and client servicing”.

Starbucks has issued a $500m US corporate sustainability bond, according to reports. The ten-year note will fund programmes that ensure coffee is grown sustainably, such as providing fair pay for workers and protecting surrounding wildlife. Bloomberg reports that Starbucks had initially looked into issuing a green bond but after speaking with banks, learnt about sustainability bonds. Scott Maw, Chief Financial Officer at Starbucks, said the bond was “significantly oversubscribed” and attracted interest from a diverse group of socially focused investors outside its normal investor base.

Acumen, the nonprofit global venture fund, has launched Acumen America, a portfolio of American social enterprises focused on tackling poverty in the US. “With the support of Robert Wood Johnson Foundation, Barclays and The Hitachi Foundation, Acumen is building a portfolio of US companies with a focus on health, workforce development and financial inclusion,” a statement said. The new initiative will make Seed and Series A investments across three sectors: health, workforce development and financial services.

Access: The Foundation for Social Investment, set up last year to help UK charities and social enterprises access social investment has announced three new programmes – a fund, worth £3.6m year, providing investment-readiness grants; a programme helping organisations develop impact management to help them raise investment and a third programme focused on social investment infrastructure.

Separately, UK-based the Centre for Voluntary Action (CIVA) is raising capital for an early-stage social investment fund after getting £1m in seed funding.