Lombard Odier Investment Managers has partnered with Affirmative Investment Mangement (AIM) for the launch of a global climate bond investment strategy that aims to help combat climate change. #
This follows a strategic partnership between the Swiss group and the UK-based fixed income manager dedicated to impact strategies.
The LO Funds–Global Climate Bond Fund consists of a diversified investment grade portfolio seeking to simultaneously deliver a low carbon and climate resilient economy, or mitigate some of the effects of climate change whilst targeting a higher yield than a typical investment grade portfolio with lower turnover.
The management team will identify investments providing positive climate-related outcomes such as renewable energy, resource efficiency, land management, water resources, physical infrastructure and marine environment.
Also opportunities in other areas such as climate change adaptation will be considered. The portfolio will be monitored by the risk management team of LOIM.
Carolina Minio-Paluello, global head of Sales and Solutions at Lombard Odier IM, commented: “Climate bonds offer a beacon of hope for closing the gap between the current and required levels of investment into climate change solutions in order to meet the COP21 objective to limit climate change to two degrees.
“The increased size and dynamism of the green bond market also goes a long way to improving how impactful investors can be. The new fund enables our investors to mobilise their capital with a clear understanding of how their assets will be deployed, while generating the same returns for the same risk as a conventional bond portfolio.”
Stephen Fitzgerald, co-founder and chairman of AIM said: “Transparency is a key consideration for investors in the rapidly growing climate bond market, where guidelines around issuance can still appear vague or arbitrary, with no single standard for qualifying projects as being environmentally sound. Expert selection is therefore crucial to ensure investors have a more comprehensive coverage of the full labelled and climate-aligned universe.”
Lombard Odier group had CHF223bn (€209.6bn) of assets under management as at the end of June 2016.