Responsible Funds Oct. 6: Who’s launching funds and who’s investing?

The latest responsible funds news.

Calvert Research and Management, the US SRI house that is now part of Eaton Vance, is considering the economic case for launching UCITS funds in Europe, according to Chief Executive John Streur. He told Responsible Investor: “There are gaps for us to fill.” He also said that the firm is evaluating making an internal tool that looks at the UN Sustainable Development Goals more widely available. During an interview in London, Streur said there is evidence that ESG is being used in price discovery.

Newcastle University in northern England has appointed Majedie, Royal London Asset Management (RLAM), and Baillie Gifford to manage its equity portfolio. A tender notice – which included the provision that tobacco companies be excluded – stated a preference for managers “working towards” low carbon solutions. Majedie and RLAM will manage UK equities and Baille Gifford will run global equities. RI was told that the appointment of RLAM is a new one but Majedie and Baille Gifford have been retained amid a routine end-of-contract tender exercise. The amount to be managed is c.80% of the endowment’s total. In May 2016, the university announced it was changing its investment policy, pledging to embed ESG. It also aimed to “divest from thermal coal and oil/tar sand companies and other non-progressive oil and gas companies within five years”. A spokesperson “didn’t expect any divestments as a direct result of this tender”.

The European Council, the EU member state body has adopted a regulation establishing a new €3.35bn SDG aligned fund to implement its European external investment plan (EIP), which aims to supports investments in African and neighbourhood countries. It is hoped that the fund will trigger investments of up to €44bn. The fund, which is designed to contribute to the SDGs, will contribute to financing projects in energy, transport, social infrastructure, digital economy, natural resources, agriculture and local services.

The Nigerian Government’s N100bn ($277m) seven-year Sukuk – which closed last Friday – was reportedly oversubscribed by 6%. It was offered by the Government’s Debt Management Office and attracted investors, including pension funds, banks, fund managers, institutions, and retail investors.

US specialist agricultural asset manager, Ceres Partners, has agreed to partner with Sprott Inc., a Canada based alternative asset manager, to launch a new fund offering institutional investors the opportunity to invest in the North American farmland market. The Ceres-Sprott Institutional Farmland Fund will seek to acquire and actively lease farmland in the US.Dutch asset manager Kempen is set to launch a €200m European sustainability fund. The Kempen European Sustainable Value Creation Fund, which will be launched next month, will invest in “European all-caps with a focus on the long-term, sustainable growth and active ownership”. RI was told by a spokesperson that the fund integrates ESG into its investment process and uses ESG ratings to create a best-in-class approach – excluding the two lowest rated categories. The fund will start with one institutional client.

Nordea’s Global Climate and Environmental Fund – a fund that has beaten 97% of its peers – has dropped Tesla, Bloomberg reports. Thomas Sorensen – manager of the €332m fund – is reported to have cited an inflated value as the rational for the move. He is quoted as saying: “We don’t see upside.”

Swiss energy, food, and water efficiency firm EFW Swiss AG has named Generac Holdings, a US-based provider of portable back-up generators as one of its top performers this quarter. The company’s share price rose by 25% in late August and September driven by demand caused by the fallout of Hurricane Irma. KFW also announced that its EFW Efficiency Fund – which tracks the company’s bespoke EFW Efficiency Index – is up 8.53% this year to date, and 5.36% up since its inception in 2014. The EFW Efficiency Index is built around the thesis that financial performance is correlated to a company’s energy, food and water efficiency.

The JLens Investor Network, a network of 9,000 individual and institutional investors seeking to apply a Jewish-faith based lens to impact investment, has raised nearly $30m for a Jewish advocacy fund. Speaking to RI, co-founder Julie Hammerman said the fund will uniquely screen for Jewish values, filling a gap in the responsible investment space. It will invest in US large-cap companies and its approach will include proxy voting, engagement on Jewish community concerns and shareholder advocacy. The fund has already co-filed shareholder resolutions at supermarket chain Costco on food waste, food multinational Tyson on water stewardship and pharmaceutical giant AmerisourceBergen on the US opioid crisis. It will also do shareholder engagement with companies targeted by the Boycott, Divest, Sanction Israel campaign. Backers of the fund include foundations, family offices and Jewish community foundations.