Virgin launches new green fund
Virgin Money, the financial services arm of Sir Richard Branson's Virgin Group, has announced the launch of an invesent fund which only puts money into environmentally-friendly companies. The program called the Virgin Climate Change Fund will invest in all sectors, not just environmentally focused businesses, which may help spur environmentally friendly business practices.
According to the Virgin Climate Change Fund website, the plan is described as an 'actively managed fund aiming to provide market leading returns by investing in specially selected companies that are driving outstanding profit growth and are environmental leaders in their industry'. Unlike many green invesent funds which specialize in green technology funding, Virgin plans to invest in all sectors, picking the best environmental performers.
At least 75% of the fund will be invested in European shares, but only companies with better-than-average environmental footprints for their sector will be selected. Up to another 15% will be invested in companies adopting environmental best practices, and the remaining balance will be invested in companies that offer solutions to environmental problems.
GLG's Environment Fund returned 7.02% net of fees last year compared to the MSCI Europe Index's return of 1.62% for the same period. Like the new Climate Change Fund, the companies in GLG'S portfolio are chosen from a performance and then environmental standpoint where no industry is excluded.
According to preliminary research conducted by Virgin Money, 29 percent of consumers prefer products and services from environmentally-friendly companies, and 68 percent said if data were available on a company's carbon footprint, they would pay more attention to the issue.
'Companies which do not adapt to changes in public opinion on environmental impact could see their returns suffer in the future,' said Pierre Lagrange, co-founder of GLG and adviser to the Virgin Climate Change Fund. 'Governments and regulators are likely to increase costs for companies which do not take into account environmental impacts and encourage those that do with subsidies and tax breaks.'
'This creates opportunities for managers such as GLG to invest in high performing greener, companies and produce strong returns for investors,' he added.
The minimum invesent into the fund, which began trading on 21 January, is £50 ($100 CAD) per month or a £500 ($1000 CAD) lump sum. There are no initial charges, but there is a 1.75% annual management fee and a 20% performance fee.
'Climate change is an issue which affects us all,' said Sir Richard Branson. 'Consumers are changing the way they spend and are increasingly looking form ore environmentally friendly ways of investing their money too. I'm delighted to be teaming up with GLG Partners in offering the Virgin Climate Change Fund and look forward to delivering our investors excellent performance without costing the Earth.'
The Virgin Climate Change Fund is a unique approach to green investing and establishes an invesent model with the potential to incent all companies across all sectors to pay more attention to the environment and to further invest in environmental technologies and consulting services.
Corporate social responsibility and the sustainability aspects of private equity investing will be the subject of a session at GLOBE 2008 taking place in Vancouver March 12-14, 2008. More information is available at www.globe2008.ca.