The Clean Energy Finance Corporation is tipping in a $25 million investment on behalf of the Australian Government to help boost the emerging Australian green bond market.
Artesian’s green bond fund is open-ended and actively managed by its fixed income team. Investing in highly liquid investment-grade green and sustainable corporate bonds issued by Australian and international issuers, as well as cash, it aims to outperform the Bloomberg AusBond Composite 0-5 Year Index benchmark.
The CEFC joins cornerstone investor Future Super as one of the biggest investors in the green bond fund.
CEFC CEO Ian Learmonth said the CEFC investment would support the further development of Australia’s clean energy fixed income sector, which was critical to meet growing investor demand for sustainable investment opportunities.
“Investor capital is increasingly seeing the benefit of exposure to green and sustainable bonds and products like this Fund provide investors with a way to support Australia’s transition to a low emissions economy,” Mr Learmonth said.
“Growth in this sector demonstrates that market returns and sustainable outcomes are not mutually exclusive.”
Artesian Chief Investment Officer, Matthew Clunies-Ross said: “We are very pleased to have the CEFC invest in the Fund, working with us to support corporate Australia in its efforts to reduce carbon emissions and tackle climate issues.
“Australia lags most developed countries on carbon metrics, so there is a lot of work to be done in our local market.”
David Gallagher, Artesian’s portfolio manager said: “The AUD green and sustainable bond market is still relatively embryonic when compared to offshore bond markets.
“By working with the CEFC and engaging with corporate Australia, we hope to increase labelled bond issuance and improve issuers’ impact reporting.
“We believe it is not necessary to sacrifice best of class risk adjusted returns while pursuing transformational impact investments.
“The Fund’s returns since inception support this.”
Moody’s Investor Service says that global sustainable bond issuances are projected to grow by 32 per cent to USD$850 billion in the world in 2021.
Artesian and the CEFC have also established the Clean Energy Seed Fund which invests in scalable, high growth potential start-ups, encouraging innovation and creating opportunities in the development of clean technology. The seed fund completed a $26 million capital raise with $10 million from CEFC.