La Française Inflection Point (LFIP) has launched an innovative, climate-themed global equities fund, just six months ahead of a pivotal United Nations climate change summit to be convened in the French capital.
La Française Lux-Inflection Point Zero Carbon (ZC), a long only Luxembourg SICAV sub-fund, was launched in mid-June with EUR25 million in seed capital provided by La Française.
Working with Paris head-quartered La Française, a multi-class asset manager with over EUR50 billion in assets under management, IPCM provided the in-depth carbon finance research underpinning the ZC fund, which is managed by LFIP. LFIP is now running close to EUR1 billion in assets against a line of Strategically Aware Investment (SAI) equity funds covering four geographic regions, namely: Euro; Europe; Emerging Markets; and Global, as well as the newly launched ZC.
La Française Chairman of the Board, Xavier Lépine (pictured), says: “The launch of the Zero Carbon fund caps a remarkably active period for LFIP and IPCM. We are starting to see real asset owner appetite for new thinking, notably in the investor response to climate change and opportunities presented by the shift to a low carbon economy. The Zero Carbon fund is a step forward to environmental democracy. It’s a unique opportunity for investors to actively participate in the development of a sustainable world. The forthcoming COP 21 in Paris has only strengthened and focused that interest, and the determination of leading institutional investors to make a positive contribution. “
The fundamental objective of the ZC fund, beyond returning a competitive, long-term, risk adjusted rate of return above its benchmark MSCI ACWI, is to:
• Provide a mainstream, institutional quality solution that allows asset owners exposure to a portfolio that, while holding best-in-class fossil fuel-based companies also includes so-called “transitioning companies”, low carbon solution providers and innovative, breakthrough carbon reduction technologies and solutions;
• Seek a Carbon Zero or neutral carbon emissions footprint for investors.
The NAV of the ZC fund depends on the market value of the stocks in the portfolio which depends on the positive growth outlook and the market valuations of the equities in the portfolio.
Donald MacDonald, the first Chair of the United Nations-backed Principles for Responsible Investment (PRI) and current Chair of the Institutional Investors Group on Climate Change (IIGCC), explained: “This is a dramatic period in the climate investment debate ahead of the UN Summit in late 2015, with critical questions being asked around fossil fuel divestment and how institutional investors can benefit from the transition to a low carbon economy.”Mr MacDonald is also a non-Executive Director at IPCM.
LFIP’s Chief Investment Officer Laurent Jacquier-Laforge, says: “Zero Carbon is a perfect illustration of the power of fusing specialized, in-depth climate research with a disciplined stock-picking, portfolio construction, and risk control system.”
IPCM Founder and LFIP Chairman Dr Matthew Kiernan, says: “The Zero Carbon strategy nestles comfortably within our overall Strategically Aware Investment (SAI) approach. It provides a clear and compelling alternative for mainstream institutional investors who wish to address climate change and benefit from the low carbon transition, but who cannot support the immediate divestment from fossil fuels, and who seek superior potential returns and company engagement than those available from passive indexes.”
