Nuveen has launched the Global Core Impact Bond fund that will invest in best-in-class ESG bond issuers and in securities that provide “direct and measurable” environmental or social impact.
The asset manager, which has around $1.2 trillion in assets under management, said the fund will invest in projects related to affordable housing, community and economic development, renewable energy and climate change, and natural resources.
Stephen Liberatore, who the firm said developed Nuveen’s ESG/impact investment process in 2007 and is the head of ESG/impact in the firm’s global fixed income business, co-manages the fund with Anupam Damani, head of international and emerging markets debt, and Jessica Zarzycki, co-portfolio manager for the existing ESG/impact US and short-duration bond strategies.
Nuveen said it was an early adopter of impact investing, starting in the 1980s, and that it had a “long track record of putting capital to work for both people and planet”.
Nuveen said that unlike some other ESG funds it would not invest in ESG laggards, regardless of price.
The fund may allocate up to 40% in emerging markets and 15% in high yield and will launch with $25 million of seed capital.
Liberatore said: “Significant investment is needed to combat some of the key issues our society faces, including climate change, global inequality and chronic housing shortages across the world. Yet the perception – an inherently false one – is that impact objectives either require a performance sacrifice or can be pursued only through private strategies.
“We firmly believe public markets, and in particular the fixed income space given its size, can offer investors attractive risk adjusted returns, while ensuring they have a measurable societal and environmental impact.”
Nuveen manages over $15 billion in ESG/impact fixed income, the firm said.
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