Responsible Funds, May 24: Vanguard, ACTIAM, Generation, Rockefeller, Hermes, LGIM, CDPQ

The latest responsible funds news

Vanguard is accepting investments for its first actively managed ESG fund, Global ESG Select Stock Fund (VEIGX), which is expected to begin trading on June 4. The portfolio will be comprised of 40 to 50 stocks that will be owned for an “extended time period”. Wellington Management, the fund’s advisor, will select 40 to 50 stocks as well as take responsibility for the fund’s voting and engagement. Vanguard said in a statement: “At times, the fund may hold companies that would be omitted by some exclusionary ESG strategies, so the fund may not be ideal for investors seeking to exclude particular sectors or companies involved in activities that are at odds with their individual values.”

ACTIAM, the Dutch fund manager, has launched its Sustainable Euro Fixed Income fund with almost €3bn in assets under management. The fund invests in Euro-dominated government and corporate bonds with a strong ESG profile, and is available to investors in France, Belgium, Luxembourg and the Netherlands. It is managed by a 19-strong team with an average industry experience of 17 years.

Generation Investment Management has closed its first $1bn impact investment fund. UBS wealth management clients have allocated the bulk ($93m) to the Sustainable Solutions Fund that will invest in sustainable companies in the areas of planetary health, people health and financial inclusion in Europe and the US. The fund is Generation’s third private equity fund and UBS’s allocation is part of a commitment to raise at least $5bn in SDG-related impact investments over five years. UBS is a founding signatory to the recently launched IFC Principles for Impact Management.

The Church of Scotland has reportedly again voted not to divest fossil fuels at its general assembly this week, despite it also voting to “recognise and affirm” the declarations of the Scottish government, UK parliament and others that we are “experiencing a climate and ecological emergency”. The failed divestment counter-motion to divest oil and gas firms by 2020 was narrowly defeated 303 votes to 263. A similar resolution was defeated last year with the church opting in favour of open-ended engagement with oil and gas companies.

Rockefeller Capital Management is now offering its ESG equity strategies in the European market with the launch of a UCITS regulated fund structure. The Rockefeller Global ESG Equity Fund and the Rockefeller US ESG Equity Fund, the first funds in the UCITS structure, are actively managed by co-portfolio managers, David Harris and Jimmy Chang. The funds were seeded by prominent, long-term European institutional investors.Legal & General Investment Management (LGIM) has added to its multi-index and ESG ranges with the launch of two new sustainable investment funds. The actively managed Future World Multi-Index funds incorporate ESG across diversified assets with the aim of providing long-term growth. LGIM said the launch was in response to investor demand for portfolios incorporating ESG and capital growth with suitable risk parameters.

Canada’s La Caisse de dépôt et placement du Québec (CDPQ) has announced C$75m (€49.8m) in financing for Medavie, a non-profit national health solutions partner. The C$75m, which could rise to $100m, is in the form of a subordinated private debt. The transaction was structured directly by CDPQ.

On May 21, Hermes celebrated the six-year anniversary of its Global Equity ESG strategy, which it says has delivered net returns of 9.61% since launch. Meanwhile its benchmark, the MSCI All Country World Index (ACWI) index, returned 8.16%. Hermes said in a statement: “We have adopted a disciplined investment process with ESG factors at its core – and along the way, we’ve proved that doing so provides more than just a ‘feel-good factor’: it can improve returns.”

Sustainable, responsible, and impact investment funds saw a record inflow of $76bn in 2018, according to a new report from research and consulting firm Impactvesting, while the first quarter of 2019 attracted $26bn. According to the report, product development and innovation are playing an important role in driving the expansion, with new funds capturing 40% of inflows to such strategies last year.

IDB Invest, a member of the Inter-American Development Bank (IDB) Group, has provided $2m in financing to regenerative agroforestry company Ejido Verde. Ejido Verde says it provides “environmentally beneficial solutions” and creates “transformative wealth for indigenous land-owning communities (known as “ejidos”). The funds will be used to establish and maintain forest plantations of 1,250 hectares of native species on ejido lands.

makesense, the fund and business incubator, has launched SEED I, a €8.2m impact investing fund which aims to finance social enterprises pre-seed. Representatives from institutional investors including the European Investment Fund and Bank of the Territories are among the all-female investment committee that will manage the fund. Financing of between €50,000 and €150,000 will be available to assist in the creation of start-ups with high impact and growth potential.