Responsible Funds, Nov. 7: Threadneedle social bond fund issues first performance report

The round-up of responsible funds news

The £49.3m (€62.9m) Threadneedle UK Social Bond Fund has launched its first interim report on the social performance of its fund covering the six-month period since it was launched in January 2014. As of July, the fund has raised and invested £28.1m in 59 bonds from 46 issuers across the UK. Thirty-nine per cent of the bonds fall into the high social performance category, 41% into medium and 20% are rated as low. A more comprehensive annual social performance report will be published in 2015.

German ethical bank GLS says it’s raised $25m (€20.1m) from private investors to contribute to the $503m Microfinance Enhancement Facility (MEF), a Luxembourg-based microfinance fund. MEF said that with the $25m capital injection, the microfinance institutions (MFIs) it supports would make an additional 7,000 loans in the trade, service and agriculture sectors of developing countries. Since MEF was launched in February 2010 under the sponsorship of German development bank KfW and the International Finance Corporation (IFC), the support it has provided has enabled MFIs to make loans worth $768m in developing countries. The MEF is managed by three microfinance specialists, including responsAbility, Blue Orchard and Cyrano Management SA.

The European Long Term Investment Fund (ELTIF) structure will be one of the ways the new European Commission will foster greater European long-term investment, according to Financial Services Commissioner Jonathan Hill quoted by The report added Hill – speaking at the Opening the Finance for Growth conference in Brussels – promised to publish an action plan to set up the EU’s planned ‘Capital Markets Union’ by next year and called for new long-term, stable debt instruments to be developed.

Spanish bank Santander has made a £13.5m investment into the new Third Sector Loan Fund that will make secured and unsecured loans into UK charities and social enterprises. The fund, which will be managed by Social and Sustainable Capital (SASC), has also attracted £15m from Big Society Capital and a £1.5m repayable grant from social investor the Social Investment Business. UK Chancellor George Osborne said: “Investment into social enterprises can play an important role in our long-term economic plan as well as in addressing the toughest social issues. I congratulate Santander, Big Society Capital and the Social Investment Business in developing this fund, and would hope to see other High Street banks following their lead.“Italy’s Ambienta SGR has closed its second environmental private equity fund at €323.5m – beating a €300m target ahead of schedule. Investors comprised pension funds, insurance companies, funds of funds and family offices from around the world, including the European Investment Fund, Generali, HarbourVest, Hermes, Pantheon, RobecoSAM, Stafford Capital Partners, Unigestion and Zurich Insurance Group. Also backing it were Italy’s CNPADC, Fondazione Enasarco, Intesa San Paolo, fondo Italiano di Investimento and Poste Vita.

Bank of America Merrill Lynch Global Research has launched the BofA Merrill Lynch Green Bond Index. It is designed to track the performance of debt issued by quasi-governments and corporations where the proceeds are to be used solely for projects and activities that promote climate or other environmental sustainability purposes. The bank said: “Development of the index has been driven by the growth of interest in this market segment following a recent surge in issuance and expectations for significant issuance to come.” It has daily historical data back to its chosen inception date of December 31, 2010.

Private equity firm Hermes GPE LLP, the joint venture between Hermes Fund Managers and GPE Partner Ltd., has announced the close of its Hermes GPE PEC II Co-investment Fund LP with total commitments of $480m. Following a foundation close in February 2014 with the BT Pension Scheme, the new vehicle’s investors include the State Teachers Retirement System of Ohio and the London Pension Fund Authority.

A new survey of ‘conservation impact investing’ has shown a market totalling approximately $23bn in the five-year period from 2009-2013. During the same period, private investments accounted for almost $2bn of this market – an amount that is growing at an average of 26% a year, and is expected to reach more than $5.6bn by 2018. The report Investing in Conservation: A landscape assessment of an emerging market was co-authored by EKO Asset Management Partners and The Nature Conservancy’s NatureVest division. It was overseen by a steering committee that also included the David and Lucile Packard Foundation, The Gordon and Betty Moore Foundation, and JPMorgan Chase & Co. The report presents findings from a survey of 56 investors, including five for-profit and nonprofit development finance institutions (DFIs) and 51 private investment organizations.