The Insurance Australia Group (IAG) statutory fund has dealt the first institutional mandate to Australia’s sole carbon fund.
The insurer has committed to investing in the arkx carbon fund, which targets investment opportunities in global markets arising from climate change and the introduction of carbon markets, such as renewable energy and carbon-reduction technologies. A spokeswoman for IAG refused to comment on the mandate. Geoff Evison, executive director of arkx, said that attractive returns could be sourced from the low-carbon sectors of the economy since “governments worldwide are introducing legislation forcing investment in these areas, such as energy efficiency”. The fund was launched in December 2007. In the period from January to May this year, it returned 9.41 per cent against the MSCI Global Index, its benchmark, which returned -5.69 per cent. Major holdings in the fund include wind-power turbine provider Vestas, and product and service provider to energy and water industries, Itron. The fund was seeded by private investors. In addition to the IAG mandate, it has secured a second mandate from an Australian fund-of-fund provider, Evison said. The arkx management team aim to raise $250 million for the fund. IAG was a foundation investor in sustainability-focused manager Generation Investment Management.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
