Responsible Funds, October 21: Calvert Investments to be acquired by Eaton Vance

Calvert Investments, the US SRI firm with around $12bn (€11bn) under management, has agreed to be acquired by New York-listed asset manager Eaton Vance. “As part of Eaton Vance, we see tremendous potential for Calvert to extend its leadership position among responsible investment managers,” said Eaton Vance CEO Thomas Faust. It comes as Calvert has reached a settlement with the Securities and Exchange Commission (SEC) relating to a mis-valued holding of toll road bonds. Calvert has paid a $3.9m fine and will also reimburse affected shareholders as part of the settlement. The issue resulted in an overstating of the net asset value (NAV) of certain Calvert mutual funds from 2008 to 2011. “The mistakes made in the past are regrettable and Calvert sincerely apologizes for them. Calvert has taken great steps to strengthen its policies and procedures,” said Calvert CEO John Streur, who joined in January 2015. In its 15-page ruling, the SEC said Calvert was “prompt and responsive” with the agency.

Symbiotics, the Geneva-based impact investing firm that’s chaired by former Pictet & Cie Senior Partner Ivan Pictet, has teamed up with UBS on a new fund promoting growth and employment in developing countries. It said it has successfully closed the SME Finance – Loans for Growth Fund, a fully subscribed $50m investment product offered by UBS to its impact investor base. The 4-year closed-end structure aims to provide loans to SME finance institutions in emerging and frontier markets. There’s a 10% ($5m) first loss risk protection co-funded by UBS and the Swiss State Secretariat for Economic Affairs (SECO). It says this is “an attractive and replicable public-private partnership model to attract private sector capital towards sustainable development goals”. Link

Rathbone Unit Trust Management has expanded its charities funds range with the launch of the multi-asset Rathbone Core Investment Fund for Charities. It will be managed by Andrew Pitt, Investment Director and Head of Charities, and will not invest directly in companies manufacturing tobacco or tobacco products, or companies that derive more than 10% of their revenues from the manufacture of alcoholic beverages, armaments, gambling, high interest rate lending or pornography. Link

State Street Global Advisors, iShares by BlackRock, Dimensional Fund Advisors and Franklin Templeton Investments are among those fund managers slammed by campaign group As You Sow for being “carbon hypocrites” in their approach to investing, based on analysis by South Pole. The research shows that the four firms, along with MFS, Vanguard, JP Morgan, Fidelity Investments, American Funds and T Rowe Price, all have average fund carbon footprints higher than the S&P 500. Dimension Fund Advisors was called out in the research as the highest emitter, with a carbon footprint 161% greater than its benchmark, while State Street and iShares came in at 141% and 123% respectively. As You Sow said the firms “preach the merits of low-carbon investing, but actually have above-average carbon holdings”.

New Zealand-based environmental firm GreenXperts has launched a NZ$10m million Certified Carbon Credit Fund in association with sister company Green Tick Certification. “The objective is to provide the New Zealand carbon market with the highest quality, lowest risk certified carbon credit portfolio,” it said.SRI firm Zevin Asset Management says it will make “some adjustments” to improve its performance. “Our performance year-to-date for clients has lagged further behind stock market indices than the returns achieved during previous stock market advances,” said President Sonia Kowal in a client update. “This, understandably, has caught our attention and we have been examining our investment process and will be implementing some adjustments that we believe can result in improvements in our performance.” There were no further details, but Kowal added: “Going forward we continue to expect that our portfolios should participate strongly in any rising stock market, while losing significantly less in any stock market decline.”

Triodos Groenfonds, Oikocredit, the Ecumenical Development Co-operative Society and the Luxembourg-based Green for Growth Fund (GGF) have all supported the first wind farm in Georgia and the Caucasus region. The European Bank for Reconstruction and Development (EBRD) and the government of Georgia called the project – a 20.7MW facility in the Gori municipality – a “landmark” for the country’s energy sector. The EBRD arranged a US$22m syndicated loan to the company Qartli Windfarm LLC for the development, construction and operation of the wind farm.

Earth Capital Partners, a London-based fund manager, is preparing to close a second round of investment on its new Nobel Sustainability Fund, which has secured backing from the Government of Monaco. The fund, which was launched last month, has received an undisclosed amount of investment from the government, alongside other undisclosed institutional investors and governments, and high net worth backer Stephen Lansdown. The fund is part of the Nobel Sustainability Trust and will invest in “the development and deployment of clean technologies” across geographies. It expects to announce further investors in coming week, it told RI.

Australian Ethical, the Sydney-based SRI firm, says it has met with banking giant Westpac on climate change. “We also met this quarter with Westpac,” the firm says in the latest quarterly report for its Advocacy Fund. “Along with the other major banks, Westpac has talked about aligning its business with the transition to a 2 degree world. We are now looking for this general commitment to be put into action, by measures like increased renewables lending and no new fossil fuel lending.” Australian Ethical said it would review Westpac’s November annual reporting and then assess how best to progress its advocacy for more responsible banking in the coming AGM season.

European fund industry body EFAMA, the European Fund and Asset Management Association, has called for the development of “procedural standards” by the industry for investment managers at European level to enable investors to evaluate different approaches to responsible investment and allow for “informed choice in the marketplace”. In a new report on responsible investment, the Brussels-based group said, “standard setting should focus on processes rather than outcomes, given the complexity in defining socially responsible behaviour of companies beyond applicable legislation”. It also saw no need for policymakers to clarify fiduciary duty in order to promote responsible investment.