Swiss asset manager Vontobel will introduce a new green bond fund to respond to growing investor demand for ESG solutions.
The Vontobel Fund, Green Bond, qualifies as an article 9 fund under SFDR regulations. It will identify issuers who use proceeds mainly for eligible environmental projects with a measurable impact in the transition to a low-carbon economy.
The portfolio managers – Daniel Karnaus and Anna Holzgang – will work alongside a team of more than 40 investment and ESG specialists to select a number of green bonds that are eligible for investment.
The fund will follow a disciplined investment process, resulting in a concentrated portfolio, with a measurable impact.
Karnaus added: “For every 1m euro invested in the fund, we estimate that we reduce carbon emissions equivalent to 492t CO2 equivalent, or about 206 fewer passenger cars on the streets per annum.”
Within the financial sector, the importance of going green in 2020 has manifested itself in the rise, nay explosion, of ESG integration.
According to the Investment Association published in November, responsible investment funds recorded net flows of £7.1bn ($9.5bn) in the first three quarters of 2020. This represents a 275% increase when compared to 2019.
Explaining the significance of the new offering, Karnaus said: “Climate change is a real financial risk for investors, and green bonds provide an effective tool to address it.”
In a recent interview with Martina Macpherson, an ESG expert who has worked in the market for 20 years, she revealed that there is a key trend amongst LPs and GPs towards ESG.
Macpherson said: “According to Preqin study on ESG trends, 89% of investors are seeing ESG focused funds perform the same way or better than non-ESG funds in private markets.”
Vontobel has been offering fixed income solutions since 1988. Its fixed income boutique manages CHF24bn ($22.08bn) in client assets across global credit, global bonds, emerging markets, and flexible strategies. The fixed income team consists of 41 investment professionals located in Zurich, New York, and Hong Kong.
Across 2020, Vontobel recorded a strong performance with CHF14.8bn of fresh money flowing into its coffers and growth across all its businesses.