Australian based fund manager, Artesian Capital Management (Artesian) has launched Australia’s first corporate focused, green and sustainable bond fund open to wholesale and retail investors. Seeded by an Australian ethically minded super fund, the fund has been running late September.
The Artesian Green & Sustainable Bond Fund offers investors access to a diversified portfolio of green, sustainable and social bonds. These types of securities can be very difficult for investors to source themselves.
Artesian believe it is not necessary to sacrifice best of class, risk adjusted returns while pursuing transformational impact investments. Therefore, the fund aims to outperform commonly used ‘vanilla’ bond indices net of fees. Whilst only a relatively short track record, the Fund has beaten its benchmark in each of the five months since inception.
“Artesian are a niche fixed income and venture capital fund manager with a strong focus on ESG and impact investing. We have been actively trading green bonds from our New York and London offices for five years, so we were delighted when we saw issuance take off in the AUD market. In saying that, the AUD green and sustainable corporate bond market is still quite niche due to its size, so it made perfect sense for us to offer this type of fund to our investors,” said Matthew Clunies-Ross, Managing Partner and Chief Investment Officer at Artesian.
Artesian have a range of impact investment focused managed funds across both venture capital and fixed income. Artesian’s new fund is the first of its kind in Australia which is open to retail investors. Access to green and sustainable bonds can be quite difficult, even for institutional investors such as superannuation funds. So the fund has proven to be popular since inception attracting institutional, wholesale and also retail investors.
The fund not only tackles climate change, it also aims to address the United Nations 17 Sustainable Development Goals (SDGs). “Whilst the fund is still in its infancy, we are quite proud we have been able to address 13 of the 17 SDGs, such as sustainable cities and communities, clean water and sanitation and gender equality through some of the corporate bonds owned by the fund,” said David Gallagher, Portfolio Manager of the fund. “We are achieving this whilst not compromising on investment returns for our investors. For example, Lendlease issued a 7yr green bond in late October and it is the best performing corporate bond in the entire AUD market over the same time period.”
Artesian believe that their investors are truly interested in the impact that their investment is making. So to account for that, they have designed a monthly report which goes into specific detail on impact projects and carbon abatement achieved through the fund’s investments.
“We believe that 2021 will be a record year for green, sustainable and social bond issuance in the AUD market. Interestingly, the first bond issued in Australia this year was a green bond by the European Investment Bank. So the early signs for 2021 issuance look quite positive” said David Gallagher.
Artesian is a global alternative investment management firm with $800M FUM, specializing in debt, venture capital, and impact investment strategies with a core focus on the Asia Pacific region. The company maintains offices in Sydney, Melbourne, Adelaide, Singapore, Jakarta, Shanghai, New York, and London.