Page 6 - DIY INVESTOR MAGAZINE - NOVEMBER 2018
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 BUILT FOR IMPACT: THE GLOBAL SUSTAINABILITY TRUST IS DESIGNED TO DELIVER POSITIVE SOCIAL AND ENVIRONMENTAL CHANGE
Global Head of Private Markets, Roger Pim explains how the new trust aims to generate long term capital growth by investing in a diversified portfolio investments intended to create positive, measurable environmental and social impact
      The Global Sustainability Trust’s remit is to accelerate the United Nations’ 17 Sustainable Development Goals and it is highly diversified both in terms of its areas of intended impact and what it invests in.
The fund is constructed around eight ‘impact pillars’: the Circular Economy, Sustainable Energy, Food
& Agriculture, Water & Sanitation, Health & Social Care, Financial Inclusion, Sustainable Real Estate & Infrastructure, and Education & Employment.
It invests in five distinct private markets: private equity, infrastructure, real estate, natural resources and private credit and is unique both in terms of the breadth of its target impact and the range of private markets it invests in. Such comprehensive coverage is only possible because Aberdeen Standard Investments (ASI) is
one of the world’s leading top 10 investors with 400 private market investment professionals, managing over £67bn around the world; people on the ground, building relationships and generating a strong pipeline of opportunities.
Crucially, ASI already embeds environmental, social and governance considerations across its investments and more than 30 ESG specialists have the experience and resources required to analyse the impact potential of any opportunity.
Our investment approach varies widely; in private equity, we invest in funds run by impact managers with specific expertise, or co-invest alongside them. We identify managers with specific skills in the impact space
– healthcare, clean energy or the circular economy - pioneering more efficient use and recovery of resources and materials.
In real estate and infrastructure we adopt a direct approach as we have strong investment expertise; in real estate we identify opportunities to deliver positive
environmental and social impact by improving existing buildings or developing new, innovative ones. Infrastructure is a key component to the portfolio given the positive impacts that can be generated from social infrastructure – hospitals, roads and schools
- and economic infrastructure such as recycling and renewable energy.
We will invest both directly and indirectly in natural resources via funds into areas such as timber, water and agriculture; in private credit, we’ll invest in debt provided directly to businesses including asset-backed loans, subordinated debt and special situations such as microfinancing low-income communities.
PORTFOLIO CONSTRUCTION AND TURNOVER
Each quarter ASI Private Markets provides a macro- economic outlook on markets and sectors and drills down into each private asset class to identify the most attractive opportunities by region in, e.g. social infrastructure, private equity or real estate.
This informs ideas and asset, market and sector allocation in the portfolio; to manage volatility we assess allocation across currencies, markets and sectors from a risk perspective to manage correlations and over- concentrations.
We target broad but flexible exposure across the eight impact pillars; weighting depends on the attractiveness of the opportunities and will fluctuate as we enter and exit investments.
The focus on less liquid private markets means our investments will tend to be long term. Private equity and real estate investments average 5 to 7 years, infrastructure investments up to 20 years and private credit can vary from 3 months for microfinance to 10 years for real estate or infrastructure projects.
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