Responsible Funds, November 1: Calvert launches hybrid green fixed income fund

Calvert Investments, the US-based sustainable investment manager, has launched a novel hybrid green fixed income fund. The Calvert Green Bond Fund will invest in a mix of corporate bonds in firms that derive at least half of their revenues from clean tech or an environmentally beneficial technology, product or service. In addition, it will invest in specific project bond issues for smart growth and transit, energy efficiency, pollution prevention, and green real estate. Cathy Roy, CIO at Calvert, told RI the fund would be seeded with $10m, but that the manager hoped to get it up to a couple of hundred million dollars “quite quickly”. Calvert said interest in green and ESG investments in the retail and institutional arena had been growing but that there had been “very little” broad market product developed for investors to tap into green bonds or ESG fixed-income. The new fund is co-managed by Roy, Vishal Khanduja, and Mauricio Agudelo. Announcement

The Brookfield Infrastructure Fund II, a global fund with a focus on transportation, renewable power, utilities, and energy assets, has had a final close at $7bn (€5.2bn), beating the original $5bn fundraising target. The more than 60 investors include institutions such as sovereign wealth funds, insurers, and public and private pension plans. New York and Toronto-listed fund manager Brookfield Asset Management itself committed $2.8bn to the fund.

The European Investment Bank is currently appraising a €60m investment in the Global Climate Partnership Fund run by Germany’s KfW and the World bank’s IFC. It is a debt fund focusing on small scale energy efficiency and renewable energy investments either directly or via local financial institutions.

The Yunus Social Business Fund, founded by Nobel Laureate and founder of the microfinance institution Grameen Bank, Muhammad Yunus, has had a pledge of $1m from the Deutsche Bank Americas Foundation to help it provide growth capital crucial to long-term recovery and sustainable development in Haiti. It’s part of Deutsche’s $5.8m package of grants and low-interest loans for post-disaster relief in the country.The Blue Moon Fund, a US-based charitable foundation, says it’s working to integrate its grant-making with its investment management, challenging the traditional foundation model which separates the functions. “We believe foundations have an obligation to employ all of their financial resources to drive positive change,” write the fund’s Chief Financial Officer Diane Schmidt and Jason Green, Chief Investment Officer in a post on Trillium Asset Management’s ‘Thinking Capital’ site. The fund is “on the cusp” of having fully invested its endowment in alignment with its mission. It’s hoped this “mission-driven investment philosophy” will encourage foundations and other asset owners to invest in accordance with their principles.

Net retail sales of ethical funds in the UK were £12m (€14.2m) in September 2013, according to trade body the Investment Management Association (IMA). Sales in the third-quarter hit £66m – the highest since the second quarter of 2011. 
Funds under management for ethical funds were £8.7bn at the end of September 2013. Their share of total funds under management was 1.2%, the same as this time last year.

A new fund investing in innovative companies that will make the food and agriculture supply chain “safer, more efficient and more sustainable” has been launched by Anterra Capital, formed by the spin-out of Rabobank’s proprietary venture capital investment team, Rabo Ventures. Rabobank will remain a cornerstone investor in Anterra alongside incoming investor Moonray Investors, the proprietary investment arm of FIL Ltd., the parent company of Fidelity Worldwide Investment.

Impax Environmental Markets Plc, the listed green investor, saw its Net Asset Value (NAV) per share return 7.2% in the three months to the end of September. This was ahead of the MSCI All Country World Index, which rose 1.1%, but marginally behind the FTSE ET100 Index of environmental subsector stocks, which rose 8.2%. It said strong performance was driven by cyclical sectors, European holdings and selected micro caps, while the Asian region and defensive holdings lagged. It added: “Underperformance of the FTSE ET100 reflects continued share price gains by Tesla Motors…whose shares the manager considers to be overvalued.”