Asset manager roundup: Amundi, IFC team up for EM green bond push
Amundi is partnering with the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to launch a $2bn (€1.9bn) emerging market green bond fund.
IFC will seed the Green Cornerstone Bund Fund with up to $325m, with Amundi raising the remaining $1.675bn from institutional investors.
The fund will buy green bonds issued by banks in Africa, Asia, the Middle East, Latin America, eastern Europe, and central Asia. It aims to be fully invested in green bonds within seven years.
The fund is the first product of a joint venture between IFC and Amundi aimed at developing green finance in emerging markets, according to a statement.
The project is intended to plug a gap in the green bond market. Although the market has been expanding rapidly in recent years, there has been little issuance from banks in developing countries.
The idea behind the partnership is to stimulate demand through the launch of the fund, and to encourage more supply of green bonds from emerging market financial issuers by providing technical assistance.
Frédéric Samama, deputy global head of institutional clients at Amundi, told IPE that pension funds AP4, ERAFP and NZ Super had expressed interest in the fund, among other institutional investors.
A spokesperson for ERAFP said accelerating the development of green bonds in emerging markets was vital for the transition towards a low carbon economy.
“The initiative of IFC and Amundi to create a structure integrating the constraints and objectives of investors is an excellent way to unlock massive investment capabilities,” the spokesperson said.
Samama said there was “fierce” competition among 16 asset managers to form the partnership with IFC. Mercer organised the competition.
According to Amundi and IFC, the fund will be the largest green bond fund dedicated to emerging markets.
IFC CEO Philippe Le Houérou said: “This green-bond fund will lower the risk for the private sector and attract new investors – essentially creating a market where there was none.
“We’ve already identified dozens of banks in many developing countries around the world that could be interested in this fund. It’s a win-win—supporting the green economy and deepening access to international markets for emerging market issuers.”
Schroders grows private assets business
Schroders Investment Management is to acquire private equity firm Adveq to accelerate the expansion of its private assets business.
The £397bn (€463bn) asset manager also said the acquisition complements its existing capabilities and expertise in real estate and infrastructure finance.
Schroders has £14bn of assets in its private assets business, which currently comprises insurance-linked securities, infrastructure debt finance and real estate.
Adveq has more than $7bn (€6.5bn) of commitments from a predominantly Swiss and German client base, including some of the largest institutional pension investors and pension funds in the region. It has recently established a client base in the US and other international markets, according to a statement on the acquisition.
Peter Harrison, group chief executive at Schroders, said: “This acquisition is characterised by a strong cultural fit between our two firms – a shared client focus and commitment to delivering excellent investment performance.
“Adveq’s impressive investment proposition, proven track record and strong position within key markets makes this partnership a complementary combination.”
Founded in 1997, Adveq invests in all private equity strategies, including venture capital, growth capital, buyout, and turnarounds through primaries, secondaries, and direct-/co-investments.
BNY Mellon targets US municipal bonds
BNY Mellon Investment Management has launched a US municipal infrastructure debt fund for intermediary and institutional investors in Europe.
The fund launch comes amid expectations of increased activity in US infrastructure development and maintenance under President Trump’s administration, and growing interest from institutional investors in US municipal bonds as an asset class.
Municipal bonds are issued to finance infrastructure sectors and projects.
Matt Oomen, head of international distribution at BNY Mellon IM, said: “US municipal infrastructure bonds have historically offered attractive yields, even at times of heightened volatility, while holding higher credit ratings and exhibiting lower default rates than the US investment grade corporate bonds.
“We believe this asset class represents an attractive risk-return profile for investors and can also benefit from a very favourable Solvency II profile.”
The fund will be sub-advised by Standish Mellon Asset Management Company.