A global fund manager has launched a global impact bond strategy.
Nuveen's Global Core Impact Bond strategy will allocate towards best-in-class ESG leading issuers and securities that provide direct and measurable environmental or social impact.
The strategy will be co-managed by Stephen Liberatore, head of ESG/impact - global fixed income, Anupam Damani, head of international and emerging markets debt, and Jessica Zarzycki, co-portfolio manager for the existing ESG/impact fixed income accounts.
"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," Liberatore said. "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."
This strategy follows on from Nuveen's other fixed income impact products, such the US) Core Impact Bond and Short Duration Impact Bond strategies.
The strategy applies Nuveen's proprietary public fixed income impact framework, which evaluates transparent use of proceeds and annual disclosure of measurable outcomes to ensure positive impact. The strategy will focus on affordable housing, community and economic development, renewable energy and climate change, and natural resources.
The strategy will also invest in best-in-class issuers that Nuveen categorises as ESG leaders.
The strategy may allocate up to 40% in emerging markets and 15% in high yield, at the managers' discretion. It will launch with US$25 million of seed capital.
"The global pandemic has brought to the fore the need to tackle social and environmental issues head on," said Andrew Kleinig, managing director, head of Australia, Nuveen. "In response, we are seeing increasing demand from our clients for investment solutions that offer both returns and tangible impact.
"We can make real progress in areas such as affordable housing and community development, by investing in a range of public fixed income sectors where proceeds can be tied to specific projects or initiatives or are used to fund entities fully engaged in such efforts. This appeals to clients globally, as they seek to align their investments to specific outcomes."
Nuveen manages over US$15 billion in ESG/impact fixed income strategies and is also one of the largest green and impact bond investors globally with AUM of US$6.6 billion as of 31 March 2021.