Columbia Threadneedle Investments has launched the Threadneedle (Lux) European Social Bond fund in partnership with INCO, a global consortium for an inclusive and sustainable economy.
It follows the launch of the Threadneedle UK Social Bond fund in 2013 with Big Issue Invest, and its US Social Bond fund in 2015.
The Threadneedle (Lux) European Social Bond fund, the first of its kind in Europe, aims to deliver both a financial and a social return by investing in corporate bonds across Europe with a clear focus on supporting positive outcomes for individuals, communities or society as a whole.
The fund is managed by Simon Bond (pictured), director of responsible investment portfolio management at Columbia Threadneedle Investments in London and manager of the UK Social Bond fund.
Bond, who has over 25 years’ experience in corporate credit, benefits from access to Columbia Threadneedle Investments’ 26-strong credit team and Columbia Threadneedle Investments’ responsible investment team.
Bond says: “We are seeing a growing demand from clients to deploy their savings in a way that can generate social benefits and sustainable positive outcomes. At the same time, we strongly believe that investors need not sacrifice performance to achieve social impact. We have a proven track record of over three years in managing outcomes-focused social bond strategies with strong risk-adjusted returns. Out of 4,000 European corporate bonds in the market, we have identified that approximately 45 per cent are social in nature across different sectors and countries. By actively selecting specific bonds with positive social outcomes, rather than excluding bonds through conventional negative screens, we aim to generate positive social and financial results. The portfolio also offers daily liquidity, therefore opening it up to a wide range of investors.”
To achieve positive outcomes, the fund takes an evidence-based approach according to a defined social opportunity framework, aligned with the United Nations Sustainable Development Goals (UNSDG) and covering social areas such as affordable housing, health, education and employment.
In a similar manner to the UK Social Bond fund, which is independently advised by Big Issue Invest, Columbia Threadneedle Investments has partnered with INCO, a Paris-based pre-eminent global consortium for a new, inclusive and sustainable economy. INCO has a strong network across continental Europe and is active in four main areas all supporting social development: investment, incubation, training and events. INCO acts as an independent adviser to the new fund.
INCO’s founder Nicolas Hazard says: “As a leading European Impact Investing organisation, INCO is proud to provide its expertise in the field of social and environmental evaluation to Columbia Threadneedle Investments. This partnership shows a common desire to support organisations that make a positive change in their community, whether they are companies, local authorities or non-profits. It fosters our ambition to build a more inclusive and sustainable finance industry.”
Initially registered in Luxembourg, the fund is intended for distribution across other markets (UK, Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Norway, Portugal, Spain, Sweden and Switzerland) pending regulatory approval in each country.