Investing at the intersection of return and impact
Investment Approach
High conviction, bottom-up driven investment process supplemented by a proprietary transition impact assessment framework to ensure that each investment promotes real-world transition, not only portfolio-level transition
Investment Opportunity
Differentiated alpha from investing in EM companies with credible commitments to transitioning to net zero or enabling a lower-carbon future
Investment Universe
An established universe of EM companies and projects – private and public debt.
Capital committed to financing both new infrastructure/industries that will speed up the energy transition, and heavy emitters with credible commitments to transitioning to net zero
EM public credit exposure and inclusion of private credit can improve yield, and credit quality, reduce rates sensitivity, and enhance downside protection
Emerging markets are typically under-represented in both public and private credit allocations and correlations with other major asset classes are typically low
EM corporate credit is the key transition financing channel. Over 60% of current emissions are in emerging markets (defined as JPMorgan EMBI constituents)
Changes in the relative values of different currencies may adversely affect the value of investments and any related income.
There is a risk that the issuers of fixed income investments (e.g. bonds) may not be able to meet interest payments nor repay the money they have borrowed. The worse the credit quality of the issuer, the greater the risk of default and therefore investment loss.
The use of derivatives may increase overall risk by magnifying the effect of both gains and losses leading to large changes in value and potentially large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss.
These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems.
There may be insufficient buyers or sellers of particular investments giving rise to delays in trading and being able to make settlements, and/or large fluctuations in value. This may lead to larger financial losses than might be anticipated.
Sustainable, impact or other sustainability-focused portfolios consider specific factors related to their strategies in assessing and selecting investments. As a result, they will exclude certain industries and companies that do not meet their criteria. This may result in their portfolios being substantially different from broader benchmarks or investment universes, which could in turn result in relative investment performance deviating significantly from the performance of the broader market.