Swedish national pensions buffer fund AP4 has invested SEK100m (€10.8m) into a new equities fund run by RobecoSAM that singles out companies clearly supporting children’s rights and welfare.
The fund – the Global Child Impact Equities Fund – has a strategy of investing in 40-60 companies that “excel in protecting children’s rights and promoting children’s welfare while exhibiting strong business fundamentals and trading below fair value”, according to the asset manager.
AP4 said the fund was developed in partnership between RobecoSAM and the Swedish royal family’s foundation Global Child Forum.
It said it is one of the first large investors in the fund.
Mats Andersson, AP4’s chief executive, said: “In our work as a long-term investor, we must do what we can to ensure children’s well-being, as they in fact are our future.”
He said it was natural for AP4 to make the investment since the investments the fund made today belonged to future generations.
“We are long-term investors, and our goal is to contribute to the stability of the national pension system,” he said.
Andersson told IPE childhood was now the third area of ESG focus for the pension fund, which had historically set its sights first on governance and secondly on trying to mitigate climate risk.
“It is pretty obvious that, as a pension fund with a long-term horizon, you should take care of these,” he said.
AP4 now plans to increase investments related to the issue of childhood over the next few years, Andersson said.
Describing the strategy of the RobecoSAM fund, he said he was sure that, by picking companies with good policies in the area of children’s rights and welfare, the fund would invest in generally well-run companies.
“If you look after your business well in terms of child welfare, you will probably look after the rest of your business in the same way,” he said.
AP4 has so far had a similar experience with its low-carbon investments, he said.
These investments, initiated four years ago, use a sector-neutral approach by excluding certain companies in each sector.
“This strategy has outperformed, even though it should really outperform when we get the carbon tax, which we do not have yet,” Andersson said.
RobecoSAM said the strategy used its own data on corporate sustainability, as well as information from the Global Child Forum Benchmark to rank companies based on how they performed on a range of child-related criteria.
The company then constructed the portfolio by combining the resulting RobecoSAM Global Child Score with Robeco’s own quantitative valuation and momentum model.
The fund’s highest sector weightings are currently financials and information technology, followed by healthcare.
The largest individual holding is Roche Holding, with a 2.85% weight, followed by Cisco Systems with 2.51%.