Some of these investments were also made by our segregated delegated accounts and, in some cases, also by our advisory clients. It is worth noting that not all of these required a long lock-up, and even those that did are often tradeable on the secondary market, opening up targeted sustainability opportunities to some investors.
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01
Advanced greenhouses for more sustainable agriculture
- Provided project finance for advanced greenhouses in North America, with numerous environmental benefits including improved crop yields and reduced water consumption, soil erosion, use of chemicals and transportation
- Committed to $40 million
- Specialist manager focused on technology-driven agriculture in an emerging sector of controlled food production
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02
Coinvestment into a leading medical training institution
- A for-profit educational institution specializing in medical training
- Address the chronic skills shortage of suitably qualified medical professionals
available to meet the increasing U.S. demand
- Coinvestment with a differentiated private equity firm focusing on long-term, actively owned investments
- Increased returns tied to key emerging educational and health care trends
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03
Investment in Japanese solar farms — global solar
- Capacity has quadrupled in the last five years with the third-largest increase in 2017 coming from Japan
- Coinvestment with one of Asia’s largest independent infrastructure managers
that specializes in the development, construction and operation of solar projects across Asia Pacific
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04
Temporary accommodation for vulnerable families
- Targeting an attractive and underexplored real estate subsector to deliver strong inflation-linked returns supported by the government
- Negotiated attractive fee schedule and fund terms to ensure robust investor
governance rights
- Strong inflation-linked, government-supported returns delivering wider societal benefit in helping to address the U.K. homeless challenge
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05
Supporting business resilience and climate preparedness
- Advancing corporate resilience and business preparedness for climate change and volatile weather patterns
- Long-standing investors in a manager’s products indirectly financing
and providing insurance against natural disasters and weather volatility
- Excellent diversification and risk-adjusted returns from insurance-linked investments
- A manager with constant innovation in weather-related
insurance products
- Leveraging our internal insurance experience as a company to deepen our manager research in niche areas
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06
Venture capital to harness scientific research
- Leveraging the intellectual power and capacity of the University of Oxford faculty and resources
- Coinvestment with a venture capital firm to finance businesses and projects
coming from the University of Oxford’s scientific and medical research departments
- Investing in difficult-to-access, unique and innovative entrepreneurial projects and start-ups
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07
Specialist social housing for disabled adults
- Providing long-term capital to a developer and manager of social housing projects to address the chronic shortage of affordable specialist housing
- Coinvestment to provide specialist-supported housing in the U.K.
- Worked with a manager to structure a fund with attractive fees and governance on an exclusive basis, including being on the investor advisory board
- Increased returns while also contributing to wider community benefits
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08
Investing in U.K. solar farms
- Invested with one of the U.K.’s largest independent managers sourcing capital for U.K. farms and handling megawatts of energy generation capacity
- Members of the investor advisory board to provide in-depth, ongoing stewardship
- Strong inflation-linked risk-adjusted returns while also contributing to wider environmental benefits and the U.K. decarbonization agenda
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09
Unlocking hydropower energy in Scotland
- Hydropower is the largest global source of renewable energy
- Coinvested in a Scottish hydropower development working with a specialist mid-market European infrastructure manager
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10
Early mover investments in government-backed social infrastructure
- Seed and subsequent fund investments with skilled manager aligned to U.K. National Infrastructure Delivery Plan to invest in housing and social infrastructure
- Seat on Investor Advisory board, negotiated improved fund terms, significant
fee discount and seed investors in first fund
- Stable contractual cash flows in long-duration inflation-linked assets, providing tangible wider economic and societal benefits
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11
Coinvestment opportunity in early stage cybersecurity venture capital
- Supported by significant tailwinds from technology and digitization, coinvested with a venture capital specialist with a 20-year track record in cybersecurity
- High expected returns from access to niche venture capital opportunities linked to emerging risks and technological change
- Cybersecurity continues to represent a growing threat globally with cybercrime cost estimated to reach $6 trillion by 20211
- Benefits from our company’s cybersecurity and insurance insights and experience to strengthen our research
Sustainable investing should be ingrained in real asset investing
In the case of real asset strategies such as property, infrastructure and agriculture, we believe sustainable investing is a natural part of being a successful long-term investor. For example, good property managers understand that developing an energy-efficient building will lead to a broader pool of potential tenants as well as better and less volatile occupancy rates than less efficient buildings. However, even for those investors struggling with this mindset, legislation is now forcing their hand, such as the Energy Act in the U.K.
Reduced fees may be attributed to other factors besides our buying power, including asset allocations to lower fee asset classes or passive management.
This is a sample representation of our work with investment managers. Reduced fees may be attributed to other factors besides our buying power, including asset allocations to lower fee asset classes or passive management. Outcomes will vary, and there is no guarantee that we can achieve savings or results with any particular manager in any particular asset class.
Social infrastructure projects, like the building and maintenance of a school, are long-term projects involving work with government bodies, developers and contractors for the collective need of local communities. Given the investments are asset-based in specific locations, technical, environmental and community impact due diligences are often embedded as part of the main investment thesis. We believe it is vital to make sure these kinds of long-term investments have the support of the nearby community, which can help with looking after the assets; as opposed to having a hostile community, which can potentially become a threat to the security of those assets. Therefore, some of our infrastructure managers have implemented charity or education programs in the areas where their assets are based in efforts to create a positive impact in the community, especially when they are in remote, rural areas in a developing country.
We believe it is vital to make sure these kinds of long-term investments have the support of the nearby community, which can help with looking after the assets; as opposed to having a hostile community, which can potentially become a threat to the security of those assets.
Stepping up on governance
In several investment cases we have advocated for, the investment managers agreed to one or more independent investment committee members being appointed as part of the governance oversight. These independents have veto rights to stop a fund from making an investment and can bring important insight in considering nonfinancial aspects of investments such as reputational impacts. We believe that improved governance structures directly improve the sustainability of returns in these types of strategies.
Disclaimer
This is a sample representation of our work with an investment manager. Reduced fees may be attributed to other factors besides our buying power, including asset allocations to lower fee asset classes or passive management. Outcomes will vary and there is no guarantee that we can achieve savings with any particular manager in any particular asset class.
Endnote
