Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Benchmarked against the MSCI World Index, the fund is advised by Integral Development Asset Management (Ideam), a subsidiary of Credit Agricole solely dedicated to SRI investments. Ideam uses an environmental screening filter created by Innovest Strategic Advisers, as well as financial criteria, to create an investment universe of 500 companies. A stock picking overlay is applied to create the final portfolio of between 200 and 230 stocks.
ôThe fund can invest in a whole range of companies,ö says Xavier de Bayser, president of Ideam. ôThis includes energy, utilities, financials, consumer staples, IT, telecommunications services and healthcare. Stock picking is mainly on the environmental protection dimension with no biases to market, sector or country.ö
InnovestÆs environmental research is based on a six-pronged ratings model that includes analysis of a companyÆs historical contingent liabilities, operational risk including toxic emissions and other waste discharge, as well as energy efficiency and the capacity to profit from environmental and industry trends.
Although the fund will not invest in Asian companies, Credit Agricole cited an increase in SRI awareness among Hong Kong investors as the main reason for expanding the Green Planet fundÆs distribution. ôAsia-Pacific is home to more than half of the world's population,ö says Nicolas Sauvage, director and head of business development, marketing and client servicing at CAAM in Hong Kong. ôAs such the way economies develop will have a profound impact on the health and stability of the entire world. Rapid growth of SRI in Europe and the United States is now being reflected by activity in Asia.ö
A survey commissioned by the Hong Kong-based Association of Sustainable and Responsible Investment in Asia (Asria) and conducted by the corporate and environmental governance program at Hong Kong University suggests that CAAM will benefit from a significant increase in awareness of SRI investing, albeit with a focus on certain sections of the population. The report found that the ideal SRI investor is likely to make weekly charitable contributions, have a high income, have a postgraduate education, be religiously active, have children and be a woman.
In its latest report on the SRI industry in Asia, Asria described Hong Kong as the second best developed market after Japan. In a further boost to the development of SRI, the first Carbon Disclosure Project report into the regionÆs corporations was published last month.
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Hesitancy aside, institutional investors eye Australia and Japan as promising geographies for private debt investments within Asia Pacific, with Greater China and Korea on the periphery.
While Asia still lags the global average, interest in sustainable projects is growing fast; the only thing needed now is the expertise to drive growth
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