RI product launches: FTSE4Good for bonds, Blackstone and Man target renewables

Major launches into the responsible investment market.

FTSE is planning to launch a corporate bond index based upon the companies that make up the FTSE4Good SRI benchmark. Will Oulton, head of responsible investment at FTSE, said it was seriously examining the launch on the back of strong client interest, although a date for marketing has not been set. The London-based index provider would be one of the largest benchmark firms to commit to an SRI bond benchmark if it launches.
Separately, private equity and hedge fund investors are showing increasing appetite for investing in the renewable energy space, following major announcements by Blackstone, the US private equity house and Man Group, the London-based hedge fund firm. Blackstone said it would invest €1bn ($1.6bn) in developing a wind farm off the German coast, by partnering with private investors who own development rights for the project, which was approved last year. The wind farm and is expected to be built within two years. It is Blackstone’s first commitment to alternative energy and notable because of the venture aspect of the deal. Wolfgang Tiefensee, German infrastructure minister, said earlier this month that the country needed to build up to 30offshore wind farms to meet targets for renewable energy.
As a result, the German government recently agreed to further subsidise wind and solar power investments.
Man Group has partnered with the Abu Dhabi Government-owned International Petroleum Investment Company (IPIC) to launch the MENA Associated Gas and Global Environment Fund (AGEF). Man said the fund aims to invest in technology that reduces and captures greenhouse gases from oil production, notably oil flare, which it estimates adds 350m tonnes of C02 to the atmosphere annually. It will also invest in energy creation projects for the excess gases. Man said it was the first fund of its kind to team a global financial institution with a government that is a major player in the energy sector. IPIC will invest an initial $300 million in the fund, which has a target of $1.5bn.
Man also recently paid $50m in cash to acquire a 25% stake in Nephila Capital, an alternative investment manager specialising in underwriting natural catastrophe insurance and investing in insurance-linked securities and weather derivatives.