The Constitutional Reserve Fund of Monaco, the principality’s sovereign wealth fund, has committed $20m (€18.7m) to Lombard Odier Investment Managers’ (LOIM) new Plastic Circularity strategy.
This investment, together with the launch of LOIM’s new value-added private equity strategy, strengthens the manager’s commitment to sustainability by driving innovation throughout the lifecycle of plastics for increased circularity across all uses, such as packaging, textiles, construction, transport and electronics.
LOIM said its Plastic Circularity strategy targets key themes including collection and sorting infrastructure, technology-enabled recycling infrastructure, design and production solutions for improved recyclability and new usage models that extend the life of plastics by reusing, refilling or repairing plastic goods.
The manager added that these activities directly contribute to a lower carbon circular economy for plastics.
With its participation in LOIM’s Plastic Circularity strategy, the principality’s Constitutional Reserve Fund, in line with the commitments of Prince Albert II, will strengthen its presence in sustainability through investments in companies that provide innovative solutions to effectively combat global warming and preserve the oceans.
The SWF has total assets worth $6.5bn according to IMSEE, Monaco’s national statistics organisation. The principality’s latest budget report published at the beginning of May showed that after a deficit of €103.2m in 2020 – which put an end to eight consecutive years of surpluses (from 2012 to 2019) – the 2021 budgetary result returned to a revenue surplus of around €8.0m.
The fund’s asset allocation includes a gold reserve worth €312m, a liquid portfolio worth €2.2bn (investing in equities, bonds and private equity), and an illiquid portfolio worth €3.9bn (investing mainly in real estate in Monaco and neighbouring municipalities).
Officials at the fund did not immediately provide a comment, however, Jean-Pascal Porcherot, co-head of LOIM and managing partner at Lombard Odier, said that Monaco’s SWF “is recognised for its strong sustainability focus”.
Monaco’s minister of finance and economy, Jean Castellini, said in March this year that the percentage of its commitments to sustainable investments is more than 50%, a rise from zero 10 years ago.
He added: “This rate brings us closer to certain funds, in particular the structures of the major American universities, which have long-favoured private equity. Alongside these investments in private equity (mainly in new technologies and sustainable development), the [SWF] has 25-30% invested in more traditional and more liquid assets (equities, bonds, etc) as part of a sustainable strategy.
“Our goal is to reach 100% one day. We started with two funds managed by CMB and CFM, Ecoplus and MEDD, with a few tens of millions of euros invested in sustainable development and in which the [SWF] was a historical and majority investor,” Castellini said.
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