Perennial to close three responsible investment funds

Perennial Partners will shutter three responsible investment funds that manage $140 million in combined assets, as they fall short of reaching scale and achieving their investment objectives.

The Perennial Better Future Trust, Perennial Better Future Active ETF (IMPQ) and Melior Australian Impact Fund will undergo an orderly wind-up, with assets to be divested and capital returned to investors.

The funds invest across Australian- and New Zealand-listed companies, with the Better Future strategies focused on small and mid-cap stocks and the Melior fund targeting large-cap companies.

IMPQ will be suspended on the ASX on October 2. It will settle its final trades on October 6 and is set to pay the final distribution on October 30.

Perennial Partners executive director Anthony Patterson pointed to shifting sustainable investing landscape and demand that has helped drive the terminations.

"Sustainable investing in Australia has evolved considerably since we first established the Better Future Trust in 2018," Patterson said.

"Investors are increasingly accessing the market through their core strategies integrating ESG principles, rather than via standalone specialist products."

Patterson said the shift meant the three funds were unlikely to reach the scale required to deliver their investment objectives over the longer term.

"With responsible investment considerations now embedded across most of our specialist investment strategies, we do not expect these funds to reach the scale needed to deliver on their investment objectives over the longer term," he said.

"We will now commence an orderly process of divesting the assets and returning capital to investors."

The wind-up reflects a broader evolution in how responsible investment considerations are incorporated across Perennial's investment offering, rather than a move away from ESG principles, with Patterson saying the firm remained focused on protecting investors' interests through the process.

"We are grateful for the mandate that investors charged us with, and we remain committed to ensuring their interests are protected and optimised through the wind-up process," he said.

Perennial Partners manages approximately $8.1 billion across its specialist investment teams, spanning Australian equities, small and micro-cap strategies, fixed income, global equities, healthcare, resources and private investments.