Responsible Funds, September 16: Aegon, Shell Foundation, LGT Sustainable Equity, Solactive

The round-up of the latest responsible funds news

Aegon has established its first ever solar fund, on behalf of a third-party client. The $80m closed fund was set up by real estate arm Aegon USA Realty Advisors (AURA) and will invest in eight US solar farms operated by FLS Energy. The investments will be backed by the country’s tax equity scheme for renewables, which was extended in December. Sean Creedon, director of community investments at AURA, described the decision as having “really breathed new life into the renewable energy industry” in the US. AURA has previously focused entirely on the tax equity market for low-income housing. “We are basically taking the experience we already have, applying it to solar and offering it to the broader market,” said Creedon.

BIX Capital, an investment vehicle founded by the Shell Foundation and Cardano Development, having secured its first tranche of capital – US$5m first loss, with the help of Shell Foundation and its carbon-finance pilot partner ECHO – says it is in final negotiations with Dutch development bank FMO, the Calvert Foundation and others to contract the senior tranche of at least US$10m before the end of 2016. Cardano is a development finance entrepreneur owned by a charitable foundation in the Netherlands. BIX works on behalf of several institutional investors to provide flexible debt financing to companies and intermediaries who can provide essential household appliances to low-income households in emerging markets.

Germany-based index provider Solactive has unveiled a new ethical offering. The Solactive Global Ethical Low Volatility AR EUR Index tracks the performance of companies that display strong environmental, social and governance (ESG) standards and low volatility characteristics. It said that ESG house Sustainalytics has provided the ESG ratings and exclusionary ethical screening criteria that underpin the index. It added: “Commerzbank AG has licensed the index to launch a wide range of products, from capital protected to more complex structures designed for their global retail and institutional client base.”

Index group FTSE Russell is studying the issuance and listing of share index of eco-friendly companies that belong to the green economy through the Abu Dhabi Securities Exchange (ADX), according to the exchange in what is believed to be “the first of its kind in the GCC countries and the Middle East”.The €267.62m LGT Sustainable Equity Fund Global fund from LGT Capital Partners – the $50bn asset manager of the Princely House of Liechtenstein – has made a return of 15.5% in the year-to-date, compared to a benchmark (MSCI World) return of 2.41%, according to its August investor update. “Mankind is facing some major social, ecological and economic challenges, such as climate change and scarcity of resources,” the fund says. “However, challenges also bring opportunities, which is where our sustainability funds come in.”

Heartwood Investment Management, a UK fund firm owned by Svenska Handelsbanken, has launched two new ethical multi asset investment strategies. The Ethical Balanced and Ethical Growth strategies incorporate negative screening and will be managed by Benjamin Matthews.

Netherlands-based ASN Bank has invested $25m in a note issued by the Global Climate Partnership Fund (GCPF) – with $20m coming from the bank treasury and the balance from foundations advised by the bank. Set up in 2009 as a public-private partnership, the Global Climate Partnership Fund aims to mitigate climate change through targeted investments in developing countries.

Iona Capital, the independent energy and environmental investment company whose investors are large local authority pension funds in the UK, has made an investment in three biomass units in North Wales operated by Newbridge Energy. Newbridge will be doubling the size of its workforce after the “multi-million pound investment”. The three new wood-chip biomass CHP [Combined Heat and Power‎] plants at Ruthin will generate a combined output of 3MWe of renewable electricity and 12MWh of reusable heat and are set to enter operation before the end of the year. Announcement

The €123m Tareno Waterfund has returned 4.4% so far this year, against a benchmark (MSCI World) return of 2.4%. The Luxembourg-domiciled fund invests in global businesses of the future that either directly or indirectly offer products and services related to the value chain of water; its top three holdings are Beijing Enterprises Water Group, China Everbright and Danaher Corp. Since launch in 2007 it has returned 73.5% (benchmark: 68%).