Responsible Funds, Nov. 29: APG launches ESG-heavy China fixed income strategy

In today’s Responsible Funds: APG, European Investment Bank, Railpen, Intesa Sanpaolo, France’s FRR, Man Group, Ørsted, Aviva, BMO Global Asset Management, ResponsAbility, Swedbank Robur

Dutch pension investor APG has launched a fixed income strategy in China in partnership with local fund manager E Fund. APG said it is the first fixed income strategy in China that “fully incorporates the Responsible Investment policies of APG’s pension funds clients”. APG is owned by civil service pension giant ABP. “Included in this is the aim to increase investments that contribute to the United Nations’ Sustainable Development Goals,” APG said in a statement, adding it is setting up offices in Shanghai and Beijing. APG added: “The APG-E Fund partnership wants to be regarded throughout the investment management industry as a thought leader and enabler for long term responsible investing inside and outside China.”

The European Commission and the European Investment Bank (EIB) have completed a public procurement process for the selection of an investment advisor to set up and manage the European Circular Bioeconomy Fund (ECBF). The selected investment advisor is ECBF Management GmbH and Hauck & Aufhäuser Fund Services S.A. will act as the Alternative Investment Fund Manager. The new fund will provide access to finance – in the form of equity, debt or quasi-equity – to innovative circular bioeconomy companies and projects of various sizes. ECBF will raise funds from public and private investors with a target fund volume of €250m and aims for a first close in the first quarter of next year.

RPMI Railpen, which manages £30bn (€35.2bn) on behalf of the UK’s railways pension schemes, has acquired a wind farm under construction in Scotland via a direct investment. Railpen purchased Tralorg Wind Farm in southwest Scotland from developer BayWa. Financial terms of the deal were not disclosed.

Intesa Sanpaolo has announced the successful completion of its €750m sustainability bond, the first for the Italian financial group. The bond, which saw demand reach €3.5bn, will support the bank’s circular economy loans. It has a fixed rate of 0.75% and a five-year maturity. Asset managers made up 75% of subscribers. Banca IMI and Crédit Agricole CIB acted as green structuring advisors and joint bookrunners. ING and Société Générale acted as joint bookrunners for the transaction.

French reserve fund the Fonds de Réserve pour les Retraites (FRR) is joining the UN-convened Net-Zero Asset Owner Alliance along with AXA, Aviva and CNP Assurances. The Alliance is a group of the world’s largest pension funds and insurers committing to fully decarbonise their portfolios to avoid a global temperature increase above 1.5°C.

London-based investment manager Man Group has reportedly launched a new global sustainable growth fund targeting companies whose sustainability profile offers a competitive advantage. Then Man GLG RI Global Sustainable Growth, managed by Virginia Nordbäck and Rory Powe, will invest in a portfolio of 25 to 35 stocks across the market-cap spectrum with the aim of outperforming the MSCI World index.

LD Funds has appointed Nordea Investment Management to manage its DKK 550m (€73m) sustainable active equity portfolio. Nordea, which saw off 17 other bidders in the tender process, will take over management of the LD Environment and Climate portfolio from 2020. The assets of the portfolio are also expected to be “significantly increased”, the Copenhagen-based pension fund revealed.

BNP Paribas has invested an undisclosed minority stake in Everland, a company focused on forest conservation projects and the voluntary carbon markets. In a statement, BNP Paribas said the deal will give it better access to carbon reduction credits.

Ørsted, the Danish utility and the world’s largest operator of offshore wind farms, has raised €600m from a 1,000-year-old green bond – attracting an orderbook more than six times the size of the offering – priced at a coupon of 1.75%. A recent analysis reported that European sustainable debt offerings for the year were on average three times oversubscribed.

Patron Capital, a private equity real estate investment firm, has collaborated with Resonance, a social impact investor, to launch the world’s first property fund supporting women experiencing or at risk of homelessness. The Women In Safe Homes (WISH) Fund will aim to provide 750 affordable homes across the UK. Big Society Capital, a social impact investor, has agreed in principle to commit £100m (€117m).

Aviva has included its Stewardship funds range on its Advisers Platform, providing an ethical ESG investing option for its pension customers. The Stewardship funds – Managed, UK Equity, UK Equity Income, International Equity and Bond – were the UK’s first ethical fund range when launched in the 1980s, and currently have £2.4bn (€2.8bn) assets under management.

BMO Global Asset Management has rebadged the BMO European Equity Fund to better reflect the fund’s sustainability focus. “Minor changes” will also be made to the strategy, now the BMO Sustainable Opportunities European Equity Fund, such as recognising companies who are “future proofing their businesses” within the research process and leveraging engagement and voting to encourage best ESG practices.

Danske Invest, the Danish asset manager, has divested tobacco from its range of actively and passively managed funds, for both equities and bonds, citing client demands from Nordic countries. The policy will be implemented after November 19, the company said.

ResponsAbility Investments, the Swiss impact asset manager that is part owned by Australian superannuation fund Christian Super, has liquidated a sustainable agriculture open-ended retail fund after rising hedging costs, declining commodity prices and volatile global economy resulted in poor performance. Since its launch, the fund has invested over $1bn in sustainable agriculture and reached more than 200 small agricultural businesses in 52 countries. The firm will continue to offer a private debt and private equity fund for institutional clients on the same theme.

Swedbank Robur, the asset management arm of Swedbank, has launched an emerging markets fund with a climate focus. The Access Edge Emerging Markets will invest 10% of assets in companies aiding the carbon transition by developing renewable energy, energy efficiency and environmental technology. The fund does not invest in companies involved in the extraction of coal, oil and gas, and those deriving more than 5% revenue from fossil fuel-generated energy.