News in brief - 16 April 2021

AXA Investment Managers has launched a climate credit strategy to help institutional investors achieve net-zero goals.

The strategy will seek to mitigate against both the physical and transitional risks related to climate change, as well as integrating specific climate-related objectives in line with investor requirements, such as the Task Force on Climate-related Financial Disclosures. As part of this, the strategy will invest in climate solutions, investments and projects that are required to meet the goal of net zero by 2050, whilst also heavily decarbonising issuers to drive the transition. It was created around the three core objectives of capital preservation, climate alignment, and credit return, and aims to provide a maturity-based approach to considering climate risk.

LGPS Central Limited has announced the launch of its £680m Multi-Asset Credit Fund.

Initial investors in the fund include Cheshire Pension Fund, Leicestershire Pension Fund, Nottinghamshire Pension Fund and the West Midlands Pension Fund. LGPS Central argued that the strategy will give partner funds exposure to multiple fixed income assets and classes through a single fund, thereby resulting in fewer managers, lower costs and a reduced governance burden. It is also expected to provide allocation to a “broad breath of strategies”, that would not be investible as a standalone asset class. Two fund managers, BMO Global Asset Management and Western Asset Management, were selected from over 80 managers who expressed an interest, with each receiving half of the total mandate.

Vontobel has added a green bond fund to its suite of environmental, social and governance (ESG) bond funds.

The fund is expected to help meet growing investor demand for solutions that combine the goal of providing attractive income with a sustainable approach. It will invest across a "global universe" of green bonds, identifying issuers who use proceeds mainly for eligible environmental projects with a measurable impact in the transition to a low-carbon economy. It aims to maximise the contribution to climate change mitigation and environmental protection, whilst also generating a steady income over a full economic cycle. The funds impact is also measurable, with an estimated reduction in carbon emissions equivalent to 492 t CO2, or about 206 cars on the street per annum, for every €1m invested in the fund.

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