Latest Launches

Schroders launches energy transition infrastructure LTAF

Deploying capital across wind and solar assets

Schroders Greencoat, the renewables and energy transition infrastructure manager of Schroders Capital, has launched a long-term asset fund (LTAF) dedicated to renewable energy and energy transition infrastructure.

The Schroders Greencoat Global Renewables+ LTAF is designed to allow UK pension savers to invest in this asset class while benefitting from “stable, diversifying and inflation-linked investment returns”. It will be managed by Schroders Greencoat alongside its Luxembourg-domiciled sister fund, the Schroders Capital Semi-Liquid Energy Transition fund, launched in January.

The fund will target infrastructure supporting the energy transition across the UK, US and Europe, providing access to long-term investments in private markets. It will deploy capital across wind and solar assets, as well as a range of energy transition assets including hydrogen, heating and storage.

Duncan Hale, portfolio manager at Schroders Greencoat, said: “We are pleased to be introducing this ground breaking LTAF, which will offer investors a powerful combination of strong returns potential with a unique risk profile, while directing essential capital towards decarbonising and electrifying our energy sources. 

“Alongside wind and solar, a dedicated portion of this portfolio also taps into newer technologies associated with energy-transition-related infrastructure, like hydrogen and district heating, which have the potential to generate superior returns across a longer period.”

According to Schroders, LTAFs are particularly suitable for the UK defined contribution and UK charities markets, providing savers with access to a previously untapped opportunity, as well as through defined benefit pension schemes. 

S&P Dow Jones launches two SDG-linked indexes

Investors can track companies’ alignment with specific UN sustainability targets

S&P Dow Jones has added to its range of sustainability-focused indexes with the launch of two more linked to the UN’s sustainable development goals (SDGs).

The S&P 500 SDG Index and the S&P Global LargeMidCap SDG Index provide diverse exposures to companies that are collectively more aligned with the United Nations’ 17 SDGs.

They use the S&P 500 Index and the S&P Global Large MidCap Index as their underlying parent and reference benchmarks for constituent screening and selection.

For benchmarking against the UN SDG they use data intended to measure the “specific external impact” companies’ products and activities are making on society and the environment, regardless of the financial materiality implications. 

The two indexes do not use data that focuses on assessing the financial materiality of ESG factors for an industry or specific company. 

Jas Duhra, global head of sustainability indices at S&P DJI, said: “S&P Dow Jones Indices is excited to bring to market these two new indices that offer market participants a unique and alternative way of tracking and measuring companies’ alignment with specific UN sustainability targets.”

Adopted by the UN’s member countries in September 2015, the 17 SDGs were established to address the world’s most critical and urgent environmental, social and governance challenges such as climate change; access to affordable and clean energy; industry, innovation and infrastructure; and decent work and economic growth amongst others.

BNP Paribas launches climate debt fund

Targeting projects that involve renewable energy, clean mobility and the circular economy

BNP Paribas has launched the BNP Paribas Climate Impact Infrastructure Debt, an SFDR Article 9 fund that invests in energy transition projects across Europe.

The fund currently holds financing for a low-carbon energy producer, a green-sourced heating platform, and a portfolio of wind farms. It hopes to raise €500-700m (£430-602m) from investors. BNP Paribas said it will target projects that involve “renewable energy, clean mobility and the circular economy”.

The private assets division at BNP Paribas will manage the project, and it will be structured as a Luxembourg Reserved Alternative Investment Fund.

Karen Azoulay, head of real assets at BNPP AM Private Assets, said: “Since the establishment of our private assets investment division, environmental solutions have been a key strategic focus.

“The launch of Climate Impact Infrastructure Debt confirms this and marks a significant step forward in our ongoing efforts to support financing the transition to a low carbon economy and offering our clients BNP Paribas’ unique origination capacity within this asset class.”

The fund will also receive support from BNP Paribas Cardif to “finance climate change mitigation”, as well as its corporate and institutional banking branch.

Olivier Hereil, deputy CEO for asset management at BNP Paribas Cardif, said: “As a responsible investor, we are proud to collaborate on the launch of Climate Impact Infrastructure Debt.

“Echoing BNP Paribas Group’s energy transition policy, our conviction at BNP Paribas Cardif is that it is essential to manage policyholders’ savings with a long-term perspective by combining financial performance with a positive impact on society. This new investment is part of our commitment to allocate an average of EUR 1 billion per year to positive impact investments by the end of 2025.”

This article first appeared on ESG Clarity’s sister site Portfolio Adviser

ACI seeks ‘diamonds in the rough’ with sustainable value strategy

Global equity strategy will look for businesses transitioning their operations

American Century Investments (ACI) has launched a sustainable value equity strategy for clients worldwide.

American Century Global Sustainable Value Equity, managed by global value equity CIO Kevin Toney, senior portfolio manager Michael Liss and portfolio manager David Byrns, will look to invest in 45-75 securities selected using bottom-up, fundamental research from ACI’s sustainable research team and a proprietary sustainability framework.

“The team will leverage our proprietary improvement pathway framework to identify companies that recognise the importance and value of transitioning their business operations to support a more sustainable economy,” said Byrns.

Head of sustainable investing Sarah Bratton-Hughes (pictured) said the strategy was not looking for sustainability leaders.

“We are seeking diamonds in the rough – companies that are committed to improving the sustainability of their business,” she said.

Neuberger Berman launches climate innovation fund

Managed by New York-based Evelyn Chow and Charlie Lim

Neuberger Berman has launched a fund to invest in technologies and solutions along the climate technology curve.

The Neuberger Berman Climate Innovation fund will maintain 30 to 60 global equity holdings.

It will focus on the key enablers and beneficiaries of climate innovation, by combining fundamental analysis with ESG investing.

The fund builds on thematic equity investing that spans themes ranging from next-generation mobility to the space economy.

Designated as Article 8 under the EU Sustainable Finance Disclosure Regulation, the fund will be benchmarked against the MSCI All-Country World Index.

It will be run by New York-based portfolio managers Evelyn Chow and Charlie Lim, who have a two-year track record in the strategy.

They will be backed by Neuberger Berman’s global equity research team of more than 49 investment professionals, as well as the firm’s data science and ESG teams.

Chow said: “Behavioral changes will only get us so far. We see a €90trn funding gap from now through 2050 to address climate change. According to the International Energy Agency, over 90% of the emissions reduction required to reach net zero will stem from the proliferation of low-carbon technologies.

Lim added: “As such, we need to triple the level of annual investment taking place to combat climate change, which is driving the emergence of a new, historic capex cycle. Investing in climate innovation offers both a secular growth opportunity and a boon to society.”

Sarah Peasey, head of Europe ESG investing at Neuberger Berman, said: “Our clients are increasingly cognizant of the risks and opportunities that exist around climate change and the broader energy transition, while also recognizing that this can affect all asset classes, across public and private companies in their portfolios. 

“As technology and policy converge to support climate innovation, this theme offers compelling opportunities for investors by directing capital to companies developing the most effective technologies while also allowing them to participate in a more sustainable society.”

Green asset managers push on with energy transition

The Investor Leadership Network’s new initiative aims to speed up financing of the energy transition

An investor-led consortium has pledged a three-year deal to accelerate pension fund and institutional investments in sustainable infrastructure and the energy transition. 

The Investor Leadership Network (ILN) has the buy-in of the United States Treasury, The Rockefeller Foundation, and the Sustainable Markets Initiative to broaden and deepen private sector financing in emerging and developing economies. 

The initiative is focused on increasing access to data and developing mechanisms to spur investments in key sectors and countries, and is set to include co-investing with multilateral development banks. The ILN said it will set up a working group in time for COP28, the 28th United Nations Climate Change conference scheduled to be held in Dubai at the end of this year. 

The ILN, which turns five this year, was launched by the Group of 7 (G7) countries to power the transition to a sustainable global economy. Made up of asset owners and managers with over $10trn assets under management, it has three key areas of focus: private capital mobilisation for sustainable development; diversity, equity and inclusion; and climate change. 

Members include Canadian pension fund CDPQ, Natixis Investment Managers and global investment manager, Ninety One. Hendrik du Toit (pictured), founder and chief executive of Ninety One, said: “To achieve real-world decarbonisation, investors must finance new infrastructure and industries that will help the transition. 

“This includes investing at scale in green technology, but also providing capital for credible transition pathways for work on today’s high emitters – especially in emerging markets. Financing the transition in emerging markets is a critical part of the path to net zero.”

The initiative’s endorsement from the United States Treasury comes as welcome news to US asset managers facing a growing backlash against sustainable investing. Most recently, Congress has listened to evidence from both sides of the debate, which is split down political fault lines, after state attorney generals lobbied the law-making body to limit ESG investing. Asset managers are battling targeted action from state attorney generals that include being sued for breach of fiduciary duty for divesting in oil and gas assets, civil investigative demands and being placed on restricted lists.