Responsible Funds, May 4: Launches from Pictet, HSBC, UBS, BNP Paribas and more

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

Pictet Asset Management and OppenheimerFunds have reportedly launched an environmental equities fund. The Ofi Pictet Global Environmental Solutions fund is officially managed by Ofi Global Asset Management, with day-to-day investment management of the fund’s assets overseen by Pictet AM. The fund will be sub-advised by OppenheimerFunds and will distribute the fund via its platform to make it available for high net worth clients and advisers.
The Kames Ethical Corporate Bond Fund claims to have returned 126% since its inception 18 years ago. The fund excludes issuers involved in ‘sin’ sectors such as alcohol, gambling and arms, and targets ESG-aligned bonds such as those from issuers that support mobility initiatives for disabled people, or develop renewable energy projects. It launched in 2000, and describes itself as one of the world’s first ethical bond funds.
HSBC has launched two low-carbon funds for Hong Kong retail investors: the Global Lower Carbon Equity fund and the Global Lower Carbon Bond fund. The equity fund will primarily invest in developed market equities, with each portfolio holding assessed for its carbon footprint pre-purchase and on an ongoing basis to ensure total carbon footprint of portfolio can be managed and reduced. The bond fund will primarily invest in investment grade corporate bonds denominated in USD, Euro and GBP. The impact of individual issuers and sectors on total greenhouse gas emissions within the portfolio will be analysed based on composite carbon intensity data.
UK pension pool Brunel is on the hunt for a manager to run its active equities. The newly-created body, which runs £29bn on behalf of local authority pension funds, will award mandates for £1.2b for UK equities and £600m for low-volatility stocks, roughly. Brunel has previously stated that responsible investment and ESG considerations will be a central part of all its mandates, and is planning to launch its responsible investment policy shortly, RI learnt this week. It last week announced that Legal & General would be its manager for some £4bn of passive mandates, including a low-carbon index.
BNP Paribas Asset Management has launched two exchange-traded funds that offer exposure to stocks with high ESG ratings. One of the vehicles focuses on Japanese equities, while the other has a European focus. Companies whose products negatively impact ESG objectives are excluded as part of the methodology. The funds are listed on Xetra and Borse Frankfurt.
Australia’s Nanuk New World Fund, which focuses on environmentally-sustainable and resource efficient stocks, claims to have been one of the world’s best performing global equity funds in the first quarter of 2018 and over the past 12 months. The fund returned 6.5% over the three months to March 31, compared with 1% for the MSCI ACWI. Over one year, it returned 27.5% compared with 14.2% for the benchmark. Investment areas include renewables and electric vehicles, aquaculture and pollution control. The fund was recently awarded accreditation from the Responsible Investment Association of Australasia.
UBS has teamed up with German index provider Solactive to create the Solactive UBS Development Bank Bond Index Family, targeting debt from the World Bank and other high-grade development banks globally. The index family is currently composed of 36 total return indices tracking the performance of USD-denominated bonds issued by development banks.
Everstone Group, an Indian private equity fund, and Lightsource BP, a renewable energy developer, have joined up to create a fund management platform for green energy infrastructure in India. The 50:50 JV, called EverSource Capital, will allocate funds for contracted power, distribution infrastructure and energy services in India. The debut fund, the Green Growth Equity Fund (GGEF), is targeting £500m. The UK and Indian government, through its National Investment and Infrastructure Fund, have already signed on as fund co-anchors with a contribution of £120m each.Social and Sustainable Capital (SASC) has released its second annual Impact Report, which looks at the positive results of £19m worth of investments in 17 charities and social enterprises. SASC’s most significant investment is £6.2m to the Heart of England Community Energy, a group of community interest companies in Warwickshire. The report outlines a number of key learnings including the importance of a blended financing approach to overcome financial constraints faced by third sector organisations and the increasing popularity of Payment by Results (outcomes based commissioning) in the public sector.
The Conference of Great Lakes St. Lawrence Governors & Premiers is seeking responses from qualified firms to manage the Great Lakes St. Lawrence Blue Growth Fund. The fund seeks to generate financial returns as well as attract investment capital for a multi-asset portfolio built around sustainable forestry management and products; smart water systems; and sustainable agriculture production and agriculture technology. Portfolio assets may include debt instruments (including
green bonds), private equity investments, public equities, derivatives such as carbon credits, project finance vehicles, and other strategies.
A renewable energy infrastructure fund managed by specialist asset manager Impax has completed the sale of an operational 36MW wind farm in Ireland to Greencoat Renewables for an undisclosed amount. Using both fund equity and third-party non-recourse project finance, the fund developed the Dromadda More wind farm after acquiring the project from a local developer in 2015. Impax said it would continue to grow its investments in Ireland.
Blended finance body Convergence Finance has awarded a grant to Women’s World Banking Asset Management to design a $100m blended fund with a gender lens. The Women’s World Banking Capital Partners Fund II will invest in women-focused financial service providers in low-income countries and places of conflict, across areas such as SME financing, affordable housing, education, and insurance. The fund will apply a methodology for assessing gender gaps to the companies it invests in. The methodology – to be developed by Women’s World Banking – will evaluate a company’s outreach to the low-income women’s market as well as the company’s own gender diversity in order to put together, implement and monitor gender action plans.
The World Bank Group has partnered with Credit Suisse to launch the Disruptive Technologies for Development Fund to pioneer innovative solutions to development challenges harnessing technologies such as blockchain, 3D printing and the Internet of Things.
The Luxembourg Stock Exchange has become the first exchange to launch a dedicated platform for SRI funds. The exchange says it aims to capture and display all ESG, green and social funds recognised by leading fund labelling organisations and to offer investors the highest level of transparency. At launch, LGX has admitted 11 SRI funds managed by five fund managers: Humanis Gestion d’Actifs, Luxembourg Microfinance and Development Fund, NN Investment Partners, Selectra and Sparinvest.
Other funds covered this week by RI include the launch of a new investment firm by emerging markets veteran Mark Mobius. The firm will focus on ESG – particularly governance – and its debut fund is targetting $1bn over the long term. Swedish pension fund AP1 has also seeded a new pooled fund from BlackRock, to the tune of $100m, with plans to commit further capital over time. The fund will focus on emerging markets equities.