Fund Flash: EFG launches sustainable HY fund, AllianzGI unveils EM climate-focused fund

Citywire Americas summarizes key news in the fund and mutual fund investing universe reported by Citywire’s global publications.

EFG Asset Management has launched a new sustainability fund designed to deliver the best returns in the high yield bond universe, Citywire selector reports.

The New Capital Sustainable World High Yield Bond fund, part of EFGAM’s New Capital fund range, was launched to complement its portfolio of high conviction global credit products.

The fund is Article 8 compliant and aims to exploit the best returns by investing convincingly in sustainable companies around the world.

Lila Fekih and Mark Remington, who are part of New Capital’s 10-member bond team, co-manage the fund. Currently, the team uses two proprietary valuation models, which assess the price of a bond and the probability of default.

Hard filters are applied, followed by an in-depth analysis assessing a company’s vulnerability to ESG risks, the financial implications of these risks and, above all, a company’s strategy to face these risks and capitalize on the opportunities. generated.

This analysis, which includes the evaluation of the effectiveness of the management’s sustainable development strategy and the execution risks involved, aims to understand the current risks but also how the future ESG trajectory impacts solvency.

In addition to the extended fixed income team, Fekih and Remington will be supported by the specialized in-house ESG team.

The team defines a sustainable business as one that effectively manages its ESG risks to protect or improve its financial profile. He may not have taken on all the challenges, but the trajectory should be positive.

AllianzGI and EIB launch emerging markets climate fund

Allianz Global Investors and the European Investment Bank have teamed up to create a new fund that will invest in green projects in emerging markets, Citywire selector reports.

Launched as the COP26 climate conference is taking place in Glasgow, Scotland, the Emerging Market Climate Action (EMCAF) fund is a public and private partnership. The German and Luxembourg governments, the Nordic Development Fund, Allianz, Folksam and the EIB are benchmark investors.

EMCAF is a fund of funds that supports climate-focused investment funds and projects active in emerging markets and developing countries. It will focus on climate change mitigation, climate change adaptation and access to electricity.

With a target size of 500 million euros ($ 580 million), it will mobilize private capital to launch climate action projects in Africa, Asia, Latin America and the Middle East.

Talk to Citywire selector At the Investment COP in Glasgow, Matt Christensen, Global Head of Sustainability and Impact Investing at AllianzGI, said that there are many unforeseen political risks in emerging markets that the models of asset managers are not able to take into account, whether it is tensions in Ukraine or the stability of Maduro’s government in Venezuela.

“The EIB has eliminated some of the risks in emerging markets, whether it’s project risk, political risk, all the different risks people face. They made it a bit easier for us to see this area as a new area for investment. ‘

“We really want to try to help these countries, because they not only want aid but would like to be seen more as investment partners.”

EMCAF will allocate to specialized investment funds, which could support projects such as onshore wind farms and solar photovoltaic plants or small and medium-sized hydropower plants. It could also support energy efficiency projects in housing or industry, or projects providing environmental or resource efficiency benefits.

The fund could finance projects that help cities and their public transport systems become more resilient against flooding or heat.

Its investors will receive impact reports, including key performance indicators such as renewable electricity produced and CO2 emissions avoided.

The EIB is responsible for market analysis, identification and valuation of investments, including their environmental and social aspects, while AllianzGI will act as an alternative investment fund manager responsible for its management and decision-making.

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