Brunel Pension Partnership, the c.£30bn (€33.1bn) UK pension pool, has appointed three asset managers – Ownership Capital, RBC Global Asset Management and Nordea Asset Management – to run a new £1.2bn listed equity fund targeting sustainability solutions.
Brunel says it wants to go beyond “traditional responsible Investing” and towards investment for positive reasons.
The new offering, called Sustainable Equities Fund, was created in response to requests from Brunel’s clients, local authority pension funds in the southwest of the UK.
It exclusively pursues companies providing both sustainability solutions and targeting financial return.
Ownership Capital is the Amsterdam-based independent long-horizon manager co-founded by former PGGM executive Alex van der Velden, the founder and ex-CEO of responsible investment charity FairPensions, now called ShareAction. RBC is the Canadian finance giant while Nordea is a leading Nordic player. Together they will form what Brunel terms a “blended solution”.
Brunel is one of eight pooled Local Government Pension Scheme funds in the UK.
“The Sustainable Equities Fund gives our clients access to both the equity risk and sustainability focus they requested,” said David Cox, Brunel’s Head of Listed Markets.
“The three managers we appointed share a broad investing style and a prioritisation of sustainability, yet their approaches are also different enough to provide clients with the diversification they were looking for.”
Brunel says it received 70 expressions of interest, from which 15 managers were invited to tender. There was a shortlist of eight which was whittled down to the final three.
“We were delighted to find managers who share our understanding of sustainability, embedding it deep into their culture and investment processes” said David Jenkins, Portfolio Manager for the Sustainable Equities Fund.
“This portfolio therefore meets our aspiration to go beyond traditional Responsible Investing and ensure that the managers are engaged with the companies and are investing in them for positive reasons, not simply focusing on negative exclusions.”
The portfolio opened with a significant underweight to GICS [Global Industry Classification Standard] energy sector and an aggregate carbon intensity that is significantly lower than the MSCI All Country World Index, which it uses as a benchmark.
Sean Johns, Funds Investment Officer at Cornwall, one of Brunel’s client funds, said the new fund was a “cutting-edge product” that helps it meet its aim of being at the forefront of responsible investment best practice.
It comes as fellow LGPS pool Northern LGPS has partnered with the Make My Money Matter campaign as part of an ambition to invest 100% of assets in line with the Paris Agreement.