Pensioenfonds PostNL has invested €400m in two new impact equity funds as part of its goal to increase its exposure to the UN’s Sustainable Development Goals (SDGs).
The two new impact funds, which will be managed by M&G and Hermes for PostNL’s fiduciary manager Kempen, will invest in companies that contribute positively to at least one of three SDGs: Good Health & Wellbeing (SDG 3); Clean and Affordable Energy (SDG 7) and Sustainable Cities and Communities (SDG 11).
The choice for two different managers has to do with risk diversification, according to René van de Kieft, president of the €10.8bn Dutch pension fund. Both managers will select 30-40 stocks.
PostNL’s interest in the fund was mostly motivated by the chance to get exposure to healthcare-related investments, Van de Kieft added, as the pension fund was already looking for an investment in this specific SDG. The new investment “partly meets our demand to invest more in SDG 3,” he added.
The pension fund will also shortly announce a new fixed income investment in SDG 3.
Van de Kieft said: “At the moment we are working on the final bits around the implementation, especially in the field of exclusions and the impact of this on the return and risk profile of the strategy.” PostNL has also picked SDG 7 as a focus SDG, but had already found investments tailored to this goal last year.
Kempen, for its part, decided to focus on multiple SDGs in order to cater to the wishes of a larger share of its pension fund clients, according to its head of fiduciary management Wilse Graveland. Besides PostNL, another pension fund has also committed to be a seed investor.
Graveland declined to reveal the name of this fund or the amount it has invested, but added several UK pension funds have also voiced their interest or are in the process of committing funds. All these funds already are fiduciary clients with Kempen.
The two global equity impact funds, which come with a fee of 55 basis points, will also be made available to Kempen’s private banking clients in the Netherlands. Once the assets under management reach a certain level, costs will be reduced automatically to 50 basis points, Graveland added.
Midcaps
The new funds should not only have a positive impact in terms of the SDGs. PostNL’s Van de Kieft also considers the investment a “satellite” within the pension fund’s equity portfolio, which is being invested mostly passively. The two funds will concentrate their investments in mid- and small caps with a market capitalisation of up to €50bn, to avoid overlap with large cap equity indices.
As a result, the two funds will not invest in large pharmaceuticals such as Pfizer, Novo Nordisk or Merck.
“Instead they invest for example in firms that develop technology to monitor patients’ health,” said Graveland, who declined to name any of the firms the funds will invest in.
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