KBI Global Investors has been awarded a €75m mandate for its Water Strategy, which will form part of Swedish buffer fund AP7’s Green Impact Equity Mandate – with the mandate expected to run for some five to 10 years.
The mandate was sought via a joint RFP response involving Tove Bangstad, head of Amundi Nordics, in response to a public tender issued last August. Of some 23 submissions, and following a ‘beauty parade’, AP7 visited KBIGI last November to complete due diligence, the Dublin based manager said.
AP7 is the default option in the Swedish PPM (Premium Pension) system and has committed to shifting towards sectors that support the UN Sustainable Development Goals. The Water Strategy mandate is linked to Goal 6 – Clean Water and Sanitation.
Johan Florén, head of ESG for AP7 said: “Our thought was that we want to put pressure on these companies and change their behaviour through blacklisting. AP7 blacklisted Exxon and Gazprom in June last year. Then we decided to take the same amount of money and invest it in green impact equity. Sustainable water investing is a priority focus for AP7. A key aspect of the mandate is the creation of bespoke metrics to measure the sustainability impact of investments – something that is notoriously difficult to do. Lots of investors and asset managers are looking to address this challenge right now and trying to come up with solutions; we don’t expect to solve it, but we want to be a part of the process.”
KBIGI manages circa €800m in Water Strategy assets – €190m of which is in a Ucits fund – on behalf of a global client base consisting of sovereign wealth funds, endowments, foundations, public pension schemes, sub advisory mandates and wealth managers, the manager stated. It has pursued a strategy around global water problems for the past 17 years.
Geoff Blake, head of Business Development & Client Services at KBIGI (pictured) said the appointment demonstrates the “successful collaborative nature of working with local Amundi offices to profile KBIGI’s products and strategies.”
“We have beaten some of the biggest and best-known names in the global asset management industry to this mandate and are working on a numerous Impact and ESG related opportunities with Amundi in Asia and Europe at this time – an area of increasing demand within the institutional and wholesale space, with growing numbers of investors looking to achieve impact through public equities. This is clear validation of our new approach to quantifying revenue impact. This demand coupled with the strong alpha proposition offered by water equity investing gives us great optimism as we look to gather assets together into these active fundamental strategies.”
Amundi acquired a majority stake in KBIGI in mid-2016.