RI ESG Briefing, June 26: Overwhelming demand for UK disability housing bond

Environmental

The UK’s new Green Investment Bank invested £635m (€748.7m) in low carbon projects during its first year of operation, leveraging £1.6bn of private investment, according to the £3bn bank’s inaugural annual report. “The bank has a number of strong deals in the pipeline, which will help it to build on the solid foundations that have now been laid,” said Business Secretary Vince Cable.

PensionDanmark, the largest labour market pension fund in Denmark at DKK145bn (€19.4bn), plans to fund a $200m investment in the first US offshore wind farm, Cape Wind. The mezzanine loan will be made via the Copenhagen Infrastructure I fund that is managed by Copenhagen Infrastructure Partners. The fund says the prominent project is “crucial” to advancing the offshore wind industry in the US. “At a time when bond yields are very low, this is expected to be an attractive investment opportunity for us,” said CEO Torben Möger Pedersen.

The fund has also announced that all the 111 turbines in the 400MW Anholt offshore project in which it has a 30% stake are now operational and connected to the grid. Link

Social

The innovative Golden Lane Housing charity bond, to finance housing for people with learning disabilities in the UK, has closed early due to “unprecedented” demand for the £10m issue from both retail and institutional investors. “This is a great result – not only for Golden Lane Housing but for the UK social investment market generally,” said Dan Hird, Head of Corporate Finance at arranger Triodos Bank. It is clear to us that the market is ready for this kind of product.” Golden Lane, a subsidiary of the Mencap charity, is also considering a further bond issue, said Director Alastair Graham.

French financial markets regulator the Autorité des marchés financiers (AMF) has approved a code of ethics proposed for real estate investment funds by real estate trade body ASPIM and asset management body AFG – and extended it to all asset management companies. The code is divided into six chapters covering conflicts of interest, best practice, shareholders’ rights, relations with intermediaries, service providers and leaseholders, relations with unit holders and employee conduct.h6. Governance

A new stock exchange has been created in Canada by a group of leading market players. Aequitas says it will be a marketplace level that “protects investors against predatory and opportunistic trading strategies”. It aims to restore the original purpose of an exchange – the efficient allocation of capital between issuers and investors. Founding investors include Barclays Corporation, CI Investments, GM Financial, ITG Canada, PSP Public Markets and Royal Bank of Canada. It will be chaired by Greg Mills, Co-Head, Global Equities, RBC Capital Markets. He said: “Aequitas is designed to promote true and reliable liquidity, and will provide an operating model more aligned with the interests of investors and issuers to support market quality.”

About 75% of fashion firm Abercrombie & Fitch’s shareholders voted against the company’s executive pay packages at the company’s annual meeting in New Albany, Ohio, on June 20, according to a filing. Slightly less than 19% of shareholders voted in favor of the pay packages in the non-binding vote.

The Council of Institutional Investors, the US body whose members have combined assets exceeding $3trn, is calling on domestic stock exchanges to require boards of listed companies to end “imperial-style” elections that result in “zombie” directors. It has written to both NYSE Euronext and Nasdaq asking them to amend their standards for listed companies so that directors who do not receive a majority of votes in uncontested elections resign promptly and aren’t reappointed.

The Investor Responsibility Research Center Institute has awarded its academic research prize to Lucian Bebchuk and Charles Wang of Harvard Law School and Alma Cohen of Tel-Aviv University for their paper entitled “Learning and the Disappearing Association between Governance and Returns”. The practitioner award went to Edward Waitzer, partner at Stikeman Elliott in Toronto and director of the Hennick Centre for Business and Law at York University, and Douglas Sarro of Osgoode Hall Law School for their “The Public Fiduciary: Emerging Themes in Canadian Fiduciary Law for Pension Trustees”. The recipients were announced at Columbia University Millstein Governance Forum.