New South Wales Local Government Super, Sydney, appointed Impax Asset Management to run A$50 million (US$45.7 million) mandate in a global equity portfolio focused on sustainability.
The A$6 billion fund is looking to reduce environmental, social and governance risks in its global equities portfolio, said Craig Turnbull, chief investment officer at LGS.
The mandate, while small, is expected to have a significant impact on the portfolio's tracking error and will be monitored closely, Mr. Turnbull said.
“These guys are a specialist thematic manager. Just like we put on a tilt to emerging markets, small-cap or value equities, this is a tilt to environmental,” Mr. Turnbull said.
Impax targets companies in the alternative energy, water and waste industries that it sees as likely beneficiaries from problems caused by environmental degradation, resource scarcity and climate change.
The investment with Impax was funded from LGS’ cash flow and a partial redemption of an existing mandate with Lazard.
Mr. Turnbull said sustainability factored into most of the investment decisions made by LGS.
“With all the managers that we employ, we like managers who are at least thinking about ESG risks. If they don’t, we won’t hire them.”
Simon Mumme writes for I&T News in Sydney.
