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RI Briefing, July 20: Report sees $125bn in sustainable investment in Sub-Saharan Africa

RI’s regular round-up of sustainable finance news.

There’s around $125bn (€88bn) in sustainable investment in Sub-Saharan Africa, according to a new study from the World Bank’s IFC. The report, based on research by SinCo and RisCura, focuses on South Africa, Nigeria and Kenya. “This report is part of IFC’s efforts to help mobilize more institutional capital into sustainable and inclusive equity funds and indices in frontier and emerging markets,” said Euan Marshall, the IFC’s Global Product Leader, Sustainable and Inclusive Investing. The IFC is to host a series of investor workshops in Africa with investors and asset owners.

The $240bn California Public Employees’ Retirement System (CalPERS) is searching for a new investment vehicle – most likely a fund of funds – that will focus on domestic emerging managers. The fund class refers to venture capital and private equity managers that invest in domestic companies with growth potential that face capital constraints. They include ethnic- and women-owned firms, urban and rural communities, companies serving low-to-moderate-income populations, and other small- and medium-sized businesses. CalPERS said the manager would invest on behalf of CalPERS in a 7- to 10-year relationship across the private equity spectrum, including venture capital, expansion capital and leverage buyout transactions.

Two sustainability screened exchange traded funds (ETFs) have been launched on Deutsche Börse’s XTF platform. They are the iShares Dow Jones Europe Sustainability Screened and the iShares Dow Jones Global Sustainability Screened. The ETFs only include the top 20% of the 600 largest European and 2,500 largest global and sustainable companies from the Dow Jones Global Total Stock Market Index and screen out companies involved in alcohol, adult entertainment, gambling and weapons. Release

Proxy advisory firm Glass Lewis has launched a service to help institutional investors recover their estimated $750bn losses on residential mortgage-backed securities (RMBS). The new offering will help pension fund clients to get “redress for the losses they incurred when originators, servicers and trustees did not fulfil their contractual and fiduciary obligations”, the company said. It will hold a conference call to discuss the service on July 26.

Microfinance organisation FINCA International has launched a socially responsible investment subsidiary with three-year $74m funding from the World Bank’s IFC, Germany’s KfW Bankengruppe, the Netherlands’ FMO and ASN-Novib Fund and the responsAbility Global Microfinance Fund (advised by responsAbility Social Investments). The new company is called FINCA Microfinance Holdings (FMH). Announcement*UK local authority pension funds are coming under pressure to divest from tobacco* companies after freedom of information requests by health campaigners revealed that many have tens off millions of pounds invested. A report in the Observer newspaper said Cornwall council has £24.5m in tobacco companies, while Devon county council has £20.8m, Gloucestershire holds £16.8m and Dorset has £14.7m. The campaigners said the local authorities could be accused of conflicts of interest when they assume legal responsibility for public health, including anti-smoking, in 2013.

Swiss-based Vontobel Group says its asset management arm has launched a new equity fund targeting companies that meet “stringent economic, ecological and social requirements”. Luxembourg-domiciled Global Responsibility Emerging Markets Equity, an addition to the ‘Global Responsibility’ funds range launched in 2008, will be under portfolio manager Stephen Tong. Announcement

Sarona Asset Management’s Sarona Frontier Markets Fund I LP has committed €1.25m to Pera Capital Partners Fund I LP, a private equity fund manager that invests in small and medium sized Turkish companies. “Because Pera also includes a strong social and environmental focus, we expect to deliver outstanding financial results to our Sarona investors, along with improved social and environmental outcomes to Turkey,” Sarona said. Release

The Ecumenical Council for Corporate Responsibility, the church-based research and advocacy group, says the News Corp. phone hacking scandal highlights the need for human rights due diligence. It called on shareholders to press News Corp. on the issue.

Bank Sarasin and Catella Real Estate have teamed up to launch a sustainable real estate fund aimed at Swiss pension fund investors. The Sarasin Sustainable Properties – European Cities fund is the first institutional real estate fund to invest solely in sustainable buildings in high-growth European cities. It aims to achieve a return of 5-5.5%.

The Interfaith Centre on Corporate Responsibility (ICCR) has published a Social Sustainability Resource Guide, titled “Building Sustainable Communities through Multi-Party Collaboration.” Link

The Pensions Trust, one of the leading occupational pension funds in the UK for the charity and non-profit sector, has added a Diversified Ethical Fund to its Flexible Retirement Plan. The Fund, which invests across asset classes globally, both screens and invests in companies that make a positive contribution to society, while engaging for best practice management of social and responsibility issues.