Responsible Funds, May 27: UBS, Aquila Capital, AXA IM, NatureVest, Rabobank, Nordea

The round-up of the latest responsible funds news

UBS Asset Management has reportedly shuttered its energy transformation fund. It was closing UBS (Lux) Equity – Energy Transformation, which was launched in May 2011 and run by James McLellan, following a drop in assets, Citywire said, citing a company spokesperson. It added that the Luxembourg-domiciled fund saw its assets fall to just $5.3m and that in terms of performance it lagged its benchmark over a three-year basis, having fallen 27.1% to the end of March 2016.

Aquila Capital, the Germany-based firm with €7.1bn under management, says it is providing institutional investors with access to its latest diversified renewable energy portfolio – the Aquila Capital Renewables Fund III 1 – via a bond solution. The securitisation has been given an indicative investment grade rating by an ESMA-recognised rating agency. CEO Roman Rosslenbroich said: “Due to significant demand, we are now making this investment opportunity available to additional investors.”

The Nature Conservancy, the US conservation body, in collaboration with JPMorgan Chase, has announced a $6m funding renewal for the Conservancy’s NatureVest impact investment program that was set up in 2014. Since then it has completed nearly $200m in transactions across each of its five business lines: water markets, green infrastructure for stormwater management in cities, working landscapes, debt swaps for climate adaptation and sustainable agriculture. Link

AXA Investment Managers says it has received responsible investment certification by the Responsible Investment Association Australasia (RIAA) for its fully integrated ESG (environmental, social and governance) SmartBeta equity pooled fund – AXA IM ACWI SmartBeta Equity Fund (the Fund).
 The fund is designed to give Australian long term investors a more efficient way of capturing equity market beta, while avoiding the limitations of both market cap-weighted indices and alternative weighting schemes.

The was a “sharp decline” in net sales of UCITS funds in Europe in the first quarter of this year, according to new data from EFAMA, the European Fund and Asset Management Association. Its latest quarterly statistical release showed UCITS, the main European fund structure, registered net outflows of €6bn in the period – compared to net inflows of €122bn in the fourth quarter of last year. Total European investment fund net assets decreased by 2.1% to €13trn with net UCITS assets falling by 3.4% to €7.9trn.Rabobank’s mortgage arm Obvion is reportedly planning to sell its first green bonds backed by mortgages on energy-efficient homes. Bloomberg cited Executive Director and Treasurer Max Bronzwaer as saying the firm has begun marketing the euro-denominated securities; the bonds are part of Obvion’s residential mortgage securitization program known as Storm. “This is a pioneering transaction targeted at green investors,” he was quoted as saying – adding the aim is that it will not be a “one-off”. Obvion was established in 2002 as a joint venture between Rabobank and Dutch pension fund ABP, with the bank later taking full control.

Nordea Asset Management has expanded its SRI fund range with the Nordea 1 – Global Stars Equity Fund, according to Portfolio Adviser. The new offering is a long-only, “benchmark-agnostic” global equities fund that combines traditional fundamental bottom-up stock selection with in-depth environmental, social and governance (ESG) analysis; it will be managed by Johan Swahn and Daniel Ovin.

The California Public Employees’ Retirement System (CalPERS) has been recognized for its pension sustainability efforts by the Government Finance Officers Association (GFOA), which presented CalPERS with an Award for Excellence in Government Finance. CalPERS won the award for its Funding Risk Mitigation Policy, which emphasizes improving the Fund’s long-term sustainability through the reduction of investment risk. CalPERS was one of two GFOA award winners from a field of 14.

Stephen Liberatore, portfolio manager for the TIAACREF Social Choice Bond Fund, has spoken of his bullishness about a green bond that teams a power utility with the US Department of Defense. “It’s a unique partnership that utilizes excess land on five military bases to install solar panels and it provides power for 30,000 homes,” he told The Southern Company system is the only electric utility in the US that partners with the US military in what it calls its ‘Pentagon Partnership’. Liberatore was also supportive of Toyota’s green bond that that funds only electric and hybrid vehicles, saying it shows that auto bonds “can be positive on climate change as well”.