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Responsible Funds, Nov. 15: FRR, Lindsell Train, Generation, BNP Paribas, BlackRock

The latest responsible funds developments

The €32.65bn Fonds de Réserve pour les Retraites (FRR), the French public pensions buffer fund, has awarded a series of four-year active US equities responsible investment mandates. Lot 1 (Value) was awarded to Amundi AM, Lazard Freres, Degroof Petercam and T Rowe Price. Lot 2 (Growth) went to T Rowe Price, Legg Mason/Clearbridge and Davy Investments/William Blair. Lot 3 (Small cap) was awarded to BNP Paribas, Davy/William Blair and Aberdeen Standard Life. The RFP had been launched in June 2018.
Lindsell Train, the UK fund manager co-founded by star fund manager Nick Train, has signed up to the Principles for Responsible Investment (PRI), according to the PRI signatory listing. The firm was established in 2000 and has around £22.1bn (€25.7bn) under management.

Generation Investment Management has co-led a $400m fundraising round which will “reduce hundreds of billions of dollars of waste in trucking” for digital freight network firm Convoy, whose previous investors include Jeff Bezos and U2’s Bono. Baillie Gifford and Fidelity Management and Research were among other investors to participate in the round, bringing Convoy’s total capital to more than $668m. Convoy’s digital freight network, which it calls a world first, uses machine learning to reduce inefficiencies in the trucking industry – lowering costs for shippers, increasing earnings for truck drivers, and eliminating the excess pollution from miles driven without cargo.

BNP Paribas Asset Management has launched its first listed real estate exchange traded fund focused on climate change. BNP Paribas Easy FTSE EPRA/NAREIT Developed Europe ex UK Green UCITS ETF will invest in the “most environmentally-friendly listed real estate companies in developed Europe (ex UK)” and has started trading on the Paris and Frankfurt exchanges. The fund replicates the FTSE EPRA NAREIT Green indices.

The Dutch government has committed €160m to climate mitigation and adaptation projects with the launch of its Dutch Fund for Climate and Development (DFCD). The commitment aims to catalyse a further €500m from the private sector for the fund, which will be managed by a consortium of FMO, Climate Fund Managers, SNV and WWF. The projects selected for investment will “boost the health of freshwater, forest, agricultural and ocean ecosystems, and improve water management”.

JP Morgan Asset Management has reportedly launched a sustainable emerging markets equity fund targeting “best in class” industry leaders and screening out unsustainable sectors and businesses. The JPMorgan Funds – Emerging Markets Sustainable Equity fund will be co-managed by portfolio managers Amit Mehta and John Citron, who are part of JPMAM’s Global Emerging Markets Fundamental Team. They will use norms and principles based exclusions as well as proprietary exclusions, before taking a “best-in-class” approach to select sustainability leaders.

Irish Life Investment Managers plans to convert the whole of its €15bn under discretionary to a responsible investing approach, according to reports quoting Managing Director Patrick Burke.

M&G is reportedly set to launch an OEIC [open-ended investment company] version of its M&G Global High Yield ESG Bond fund, which is currently a Luxembourg-based SICAV fund with £55m in assets. It is managed by deputy head of wholesale fixed income Stefan Isaacs, alongside Lu Yu and James Tomlins. Link

The Nobel Foundation has used data provider Impact-Cubed to conduct a “full sustainability footprint” of its listed equity portfolio, consisting of 10 externally managed strategies. It plans to repeat the footprinting exercise every six months to track the sustainability performance of its equity managers individually and in aggregate. According to the foundation, the total portfolio footprint showed that the aggregated investments have a positive net sustainability impact overall, with especially strong results on environmental externalities (carbon, waste and water efficiency) and SDG alignment of products and services.BlackRock has launched what it says are Europe’s first ESG high yield bond UCITS ETFs in collaboration with Dutch insurer a.s.r. The iShares € High Yield Corp Bond ESG UCITS ETF (EHYD) and the iShares $ High Yield Corp Bond ESG UCITS ETF (DHYD) deliver “an ESG score uplift as well as carbon emissions reduction, compared to standard parent benchmarks”. The funds will track the Bloomberg Barclays MSCI Euro Corporate High Yield SRI and Sustainable BB+ Bond Index and the Bloomberg Barclays MSCI US Corporate High Yield SRI and Sustainable BB+ Bond Index respectively. BlackRock was targeted by Extinction Rebellion climate activists in London today.

Domini Investment Trust has registered the Domini Sustainable Solutions fund series with the Securities and Exchange Commission (SEC). The fund will be sub-advised by SSGA Funds Management (part of State Street) and managed by Domini founder Amy Domini Thornton and CEO Carole Laible.

The new Columbia Threadneedle European Sustainable Infrastructure Fund (ESIF) is to acquire ferry service operator Condor Ferries from the Macquarie European Infrastructure Fund II, managed by Macquarie Infrastructure and Real Assets. The acquisition is made in consortium with Brittany Ferries, which has a minority stake. ESIF is a new open-ended fund that invests in European mid-market equity assets, managed by leading global asset management group Columbia Threadneedle Investments.

Nest, the UK workplace scheme, has appointed Wells Fargo Asset Management (WFAM) to manage a segregated global corporate bond mandate of around £500m, citing WFAM’s dedicated ESG strategy team as a reason for its selection. Anders Lundgren, Nest’s Head of Public Markets and Investment Strategy, said: “A segregated mandate gives us greater control over how our member’s money is invested, ensuring we adhere to our strong ESG criteria.”

French responsible investment house Mirova has finalised a €857m fundraise for Eurofideme 4, its fourth renewable energy infrastructure fund. The core of the strategy is greenfield or brownfield projects using proven technologies such as onshore wind energy, solar photovoltaics, and hydropower, while it can also invest in developing projects or less mature market segments, such as electricity storage. The fund has already deployed more than €300m to finance nearly 600 MW of projects in Europe.

Credit Suisse has launched a fund dedicated to tracking the 12th UN Sustainable Development Goal, “Responsible Consumption and Production”. The Credit Suisse Responsible Consumer Fund will invest in businesses that stand to benefit from the changes triggered by a world transitioning to a more sustainable economy. Lombard Odier was selected as advisor due to its “expertise in both thematic and sustainable investments”.

Liontrust, the UK funds house, has launched a new global sustainability fund to “meet the growing demand for sustainable investment from across continental Europe”. Managed by Simon Clements and Peter Michaelis, the Ireland-domiciled GF Sustainable Future Global Growth Fund will invest in “well run companies” who capitalise on structural shifts such as the move towards a low carbon economy, digital security and healthier eating. The Liontrust Sustainable Investment team – which joined Liontrust in 2016 – has doubled its assets under management from £2.3bn in 2017 to £4.6bn currently.

An ex-trader at hedge fund Edoma Partners has launched one of the first hedge funds focusing solely on responsible investment, according to media reports. Quentin Dumortier has set up hedge fund firm Atlas Global Investors and plans to select stocks based on performance in categories such as water conservation, clean mobility and financial inclusion. The fund will use Truvalue Labs data and natural language processing.