The investment team said the fund would invest in up to 35 companies globally, whose activities help improve well-being and inclusion, and support the move towards a sustainable economy.
Martin Currie, a UK-based investment manager, has launched its first social impact fund, which has an Article 9 classification under the EU’s Sustainable Finance Disclosure Regulation (SFDR).
The FTGF Martin Currie Improving Society Fund will be registered for distribution in France, Italy, Luxembourg, Netherlands, Sweden and the UK initially. It will target socially focused investments aligned with UN SDGs with potential for long-term capital growth.
Martin Currie is part of London-based Franklin Templeton, and the new vehicle is a sub-fund of the Franklin Templeton Global Funds range, which is domiciled in Ireland.
It will invest in a portfolio of 20-35 companies around the world, which Martin Currie describes as concentrated, high conviction and long-term investments. Their activities will contribute to improvements in well-being and inclusion, and support a just transition toward a sustainable economy, according to the investment manager.
The strategy is intended to deliver “strong risk-adjusted returns”. Martin Currie notes that “the social impact investment universe has historically had lower volatility than and comparable returns to the MSCI All Country World Index”.
Lauran Halpin, portfolio manager and head of impact equities at Martin Currie said there was an opportunity to make investments creating impact at scale in areas such as broadening access to clean drinking water, healthcare and education and re-skilling people to work in a green economy.
Societal development objectives had “historically been grossly underfunded and abandoned in some communities to focus on other important issues like climate change and Covid-19″, she said.
The fund’s investments in companies innovating to meet societal needs would also generate cash flow and returns that could be reinvested in addressing other societal issues. “Companies with products that make a difference in people’s lives can benefit from long-term profit pools generated by ongoing societal needs and ultimately gain a competitive advantage,” Halpin said.
The investment team for the fund comprises Halpin and John Gilmore, portfolio manager, impact equities, who is also a stewardship, sustainability and impact specialist. David Sheasby, head of Martin Currie’s stewardship, sustainability and impact team, is acting as advisor on the fund.
The company said the strategy for the Article 9 fund had been designed to allow investors to access portfolio companies aiming to achieve “intentional and real impact”.
The investment manager has developed a proprietary impact framework, which it says allows it to measure social impact made by investee companies through “company-specific key performance indicators and engagement objectives”. The contributions of underlying companies against seven SDGs relevant to social impact will also be part of the assessment.