Responsible Funds, October 14: ERAFP, Hermes, Oak Foundation, Impax AM, Woodford

The latest responsible funds developments

ERAFP, France’s public service additional pension scheme, a 100% SRI investor with over €23bn in assets, has hired two proxy voting agencies for the research for its voting strategy at corporate AGMs, one for French companies and one for its international corporate share holdings. Proxinvest, the Paris-based proxy firm will do the research for the French equity exposure, while the Brussels office of the US proxy firm, ISS, will look after the international portion. The contracts will run for three years. The hires have been made as part of a project part funded by the European Union.

A new fund structure for UK charities has been developed by the Investment Association, the Charity Investors Group and the Charity Law Association. The Charity Authorised Investment Fund (CAIF) will only be open to investment from charities and will themselves be registered as charities and so enjoy full charitable tax status. Peter Capper, Fund and Investment Risk Specialist at the Investment Association, said: “This new structure combines clear tax efficiencies and full regulatory protection in a tailor-made product suited to the asset management industry’s clients in the charity sector, which clearly need every advantage they can get in order to deliver for good causes.”

A host of fund managers including Jupiter Asset Management, Newton Investment Management and the Environment Agency Pension Fund have pledged to vote against board committee appointments at companies that do not have enough women executives. The 30% Club, which campaigns for greater representation of women in corporate senior management, has called for other fund managers to follow suit.

The Institutional Investors Group on Climate Change (IIGCC) has launched a guide setting out the threats facing the automotive sector and investor expectations for how companies must adapt to address climate related risk and build a sustainable low carbon transport system for the future. Commenting on the guide, CEO Stephanie Pfeifer said: “This guide signals a new area of concerted engagement between big investors and one of the most significant sectors when it comes to tackling the climate challenge. As a consequence of the Paris Agreement, investors expect regulatory frameworks affecting the automotive sector to become far more stringent, not least those governing vehicle fuel performance standards in the EU and elsewhere.”

PG Impact Investments has made its first investment in the financial inclusion sector backing the BlueOrchard Microfinance Fund. In addition, PG Impact Investments has agreed a bespoke joint-venture arrangement with BlueOrchard to jointly invest directly in select microfinance institutions.Hermes Investment Management, the fund firm owned by the BT Pension Scheme, has reportedly called for UK firms to cap pay to senior executives. Sky News, citing unnamed sources, reported that Hermes has begun “circulating” a document on the idea among the chairs of FTSE-350 companies’ remuneration committees. The report added that a final document is expected to be published within the next month.

London-based EOS Investment Management’s Italian clean energy fund Efesto Energy has received €40m in investment from Intesa Sanpaolo. The transaction was structured and coordinated by Banca IMI – the investment bank of the Intesa SanPaolo Group – which acted as Mandated Lead Arranger and Agent Bank. The Efesto Energy fund is managed by EOS IM and currently holds a total of 24 photovoltaic plants in ten Italian regions with a total capacity of 27 MW, corresponding to a value of over than €65m.

The UK government has reappointed Social Investment Business to manage the Social Enterprise Investment Fund (SEIF) a loan fund for social care and health social enterprises. The value of the tender is £447,479. Since it began in 2007 the SEIF has invested more than £110m in the health and social care sector.

The Oak Foundation has launched the Climate Justice Resilience Fund to invest in communities on the “frontlines of climate change”. “A lot of climate funding is focused on mitigation. Oak sees an opportunity to build the social justice element of climate philanthropy,” said Anne Henshaw, Environment Programme Officer at Oak and leader of the Climate Justice Resilience Fund. Oak has provided $20m to New Venture Fund over the next six years to award grants to organisations that invest in communities most impacted by climate change in East Africa, the Bay of Bengal and the Arctic. Heather McGray will be joining New Venture Fund as Director of the Climate Justice Resilience Fund to implement the grant-making strategic framework, in coordination with Oak programme staff. Link

Impax Asset Management, the AIM-quoted environmental specialist, says its assets under management have reached a “new peak” of £4.5bn (€5bn) as at the end of September. It represents a 59% increase over the past year and CEO Ian Simm said: “With an investment process that has been developed since the late 1990s, all our listed equity strategies have outperformed their global and environmental benchmarks for the full year.” Link

Woodford Investment Management, headed by star manager Neil Woodford, has reportedly launched an offshore feeder fund its CF Woodford Equity Income fund, its flagship equity income fund. Citywire said Woodford has registered a UCITS-compliant Dublin-domiciled version of the fund.