Martin Curriea specialist investment manager of Franklin Templetonannounced the launch of its first social impact fund. We are talking about the FTGF Martin Currie Improving Society Fund, classified as an Article 9 under the European Union’s Sustainable Finance Disclosure Regulation (SFDR). The fund in question will be registered for distribution initially in France, Italy, Luxembourg, the Netherlands, Sweden and the United Kingdom.
How the fund works
This new social impact global equity fund aims to ensure long-term capital growth while promoting equal social opportunities and narrowing the gender equality gap. Specifically, the new fund will invest in a concentrated, high-conviction, long-term portfolio of 20-35 companies globally contributing to three pillars of impact:
Improving Wellbeing, Improving Inclusion and Supporting a smooth transition to a sustainable economy.
With over 70 years of combined experience in global and international investing, the Edinburgh-based fund’s investment team is made up of Lauran HalpinPortfolio Manager e Head of Impact Equities di Martin Currie, e John GilmorePortfolio Manager, Impact Equities e Stewardship, Sustainability & Impact Specialist. David Sheasby, Head of the Stewardship, Sustainability and Impact team, will act as advisor to the investment team; Sheasby is an expert on active ownership and impact frameworks.
Focus on long-term growth
“These goals have historically been grossly underfunded and in some communities have been abandoned to focus on other important issues such as climate change and COVID-19. According to estimates by the Organization for Economic Co-operation and Development (OECD), the annual funding gap to meet the United Nations Sustainable Development Goals (SDGs) stands at $2.5 trillion. There is significant opportunity to create impact at scale, by investing in companies that contribute to meeting social needs urgent, like ensure access to clean water, health care and educationas well as funding retraining to work in a green economy,” said Halpin.
“This new fund, Halpin continues, invests in companies that innovate to meet society’s needs with long-term growth potential, which in turn encourages cash flows and returns and reinvestment to address other societal issues. Companies with products that make a difference in people’s lives can take advantage of the long-term profit pools generated by ongoing social needs and ultimately gain a competitive advantage.”
The strategy also aims to achieve strong risk-adjusted returns; the social impact investing universe has historically experienced lower volatility and comparable returns to the MSCI All Country World index.
“This exciting new launch brings our first Article 9 fund to market and provides clients with an innovative social impact fund,” said Mel Bucher, Head of Global Distribution at Martin Currie. “Importantly, the investment team designed and built this strategy to access portfolio companies that aim to make an intentional and real impact. We expect the portfolio to include underlying holdings that are not present in conventional global equity funds and therefore will complement existing allocations.”