Comgest, the $37bn AUM international equities asset management group focused on long-term quality growth with robust ESG integration, has launched a new emerging markets fund with investor seed capital of $250m from four UK investors, including the National Trust, the Joseph Rowntree Foundation, Guardian Media Group and the NESTA Trust.
Open to external investors, the Comgest Growth Emerging Markets Plus fund has been launched in direct response to client demand for "portfolios applying formal ethical exclusions, notably a zero-tolerance approach to fossil fuel extraction, reserves and power generation," Comgest stated.
Although the manager's existing global emerging markets strategy has no or low direct fossil fuel exposure, the Plus fund adopts formal exclusions and will adhere to the requirements of several European ESG/ SRI labels, including Germany's FNG and Belgium's Towards Sustainability (Febelfin). Application of the labels will necessarily exclude companies involved in areas such as nuclear energy or uranium mining (5% revenue threshold), in which the flagship fund also has no current investments.
The Plus fund will run a concentrated porrtfolio of high quality long-term growth companies, and ensure a high level of engagement on ESG issues. Key holdings in both the existing GEM and the new Plus strategies include Ping An Insurance, TSMC and Sanlam.
The Comgest Growth Emerging Markets fund domiciled in Dublin has over $5.2bn AUM and the parallel French-domiciled fund Magellan, the firm's longest-running GEM fund has over €2.9bn AUM.
Juliette Alves, Emerging Markets portfolio manager at Comgest for the past decade, said: "Comgest's philosophy as a long-term steward of our clients' assets is to fully integrate ESG considerations into our investment decision making process. However, we understand that some investors now require portfolios with strict ethical exclusions, such as fossil fuel-free. Given the high overlap in holdings, we expect the new fund will deliver similar performance characteristics to our flagship product."