Asset management roundup: Luxembourg picks for impact strategy

Schroders, BlueOrchard Finance and the Luxembourg finance ministry are launching an impact strategy with the goal of contributing to the transition to carbon-neutral and resilient economies, in addition to achieving sustainable growth in emerging markets.

The initiative will specifically focus on the environment and is aimed at channelling investments from both the public and the private sectors via an “innovative” Luxembourg-based financing vehicle that will help to close the climate finance funding gap.

A spokesman for the finance ministry told IPE it was too early for it to comment about target sizes and details of investors.

“We will communicate on this once the initiative is legally established and approved,” he said. “Right now we are announcing the partnership and its focus.”

Schroders and its impact investment specialist BlueOrchard were selected in an international tender process. Schroders will provide the portfolio and risk management services as the alternative investment fund manager while BlueOrchard has been appointed as the investment manager for the climate impact strategy.

“It is crucial to our common future that we solve the issues of climate change and environmental protection both nationally and internationally,” said finance minister Yuriko Backes.

“With this new partnership, we are strengthening our long-term commitment to blended finance and helping seed a new strategy that supports sustainable investments and contributes to resilient economies in emerging markets.”

Referring to a “landmark mandate”, BlueOrchard chief executive officer Philipp Mueller said the impact specialist was “proud that the Luxembourg government has recognised our expertise in innovative blended finance strategies”.

The Luxembourg pension reserve fund has in recent years made moves into impact investing.

MJ Hudson partners with GP restructuring adviser

Asset management consultancy MJ Hudson has entered into a strategic partnership with Cork Gully, a financial and operational restructuring adviser.

The partnership has been formed to provide a range of services to private markets fund managers, investors and related parties, including the replacement of a general partner, and the continuation or winding down of funds and similar structures, particularly where that structure or a connected party is under stress.

The organisations said that while such situations are relatively rare, underlying demand will remain and may increase in times of general economic disruption or uncertainty.

“Whilst there is always a small proportion of funds that will require restructuring, or similar, it may be that there is increased need for these services as the impacts of public health and geopolitical issues are worked through,” said Matthew Hudson, CEO of MJ Hudson.

AllianceBernstein enters into blockchain collaboration

AllianceBernstein and Allfunds Blockchain are collaborating to adapt AB’s asset services activities to the blockchain ecosystem, they announced this week.

According to the announcement, AB will connect its global operational activity with the Allfunds platform to Allfunds Blockchain, which “offers the possibility to transform operational processes in the fund industry value chain and provide legacy platforms with efficiency, agility, accuracy, and the increased safety blockchain technology delivers”.

The collaboration will offer Allfunds Blockchain solutions across AB’s EU domiciled-global platform.

Karl Sprules, global head of technology and operations at AllianceBernstein said the asset manager’s interest in blockchain was born out of an internal, innovative ideation workshop hosted jointly between AB and parent Equitable Holdings for employees in 2021.

“More than 100 colleagues across both organisations participated in the programme, working to increase firmwide knowledge of disruptive technologies and closely examine how blockchain and cryptocurrency can be used in the financial services industry,” he said.

“A year later, we are excited to announce this integrative collaboration between AB and Allfunds Blockchain, which we believe is an important step forward for the future of our firm – and across the industry.”

23% growth for European alts managers – Moody’s

EQT, ICG, Man Group, Partners Group, PATRIZIA, and Tikehau Capital, reported a 23% increase in combined assets under management (AUM) in 2021 compared with 2020, with scope for further AUM and revenue growth this year, Moody’s has said.

In 2021 the six alternative asset managers’ assets reached €477bn, the rating agency said in the first instalment of a semi-annual report on the group.

This represents a near-doubling of AUM since 2017.

Moody’s said that rising inflation may weaken portfolio companies’ operating performance, but a combination of high inflation, economic turbulence and supportive government policy may make infrastructure assets more attractive.

Preqin forecasts that AUM in private infrastructure will reach $1.87trn by 2026, overtaking real estate to become the largest real asset class, Moody’s noted.

Management and performance fee income for the group of six managers grew significantly in 2021, the former rising by 35% to over €4bn and revenue from performance fees more than tripling.

Moody’s said the increase was driven by Partners Group, which benefited from a “catch up” in exit activities delayed by COVID-19. 

It focussed on the six managers that it did because it was looking for a broad rand of alternative asset managers that were both headquartered in Europe and publicly disclose financials.

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