Andrew Caffery

Fidelity International (“Fidelity”) has announced the launch of its second real estate climate impact fund, the Fidelity Real Estate Logistics Climate Impact Fund (the “LOGICs” fund, the Fund), successfully raising €200m^[1] during its first close, supporting an accelerated energy transition in the real estate sector. Rest Super, one of Australia’s largest profit-to-member superannuation funds, is a cornerstone investor in the Fund and is committing €80m to the Fund at first close, with the intention of committing a further €120m to the Fund over the subsequent closes.

With over 40% of total carbon emissions being emitted from real estate^[2], the asset class plays a pivotal role in the race to net zero. But with 85% of buildings in the EU over 20 years old^[3], there is an urgent and appealing investment opportunity to help turn brown to green.

The LOGICs fund, which will invest solely in the logistics sector across core Western European^[4] markets, will follow a value-add approach of acquiring existing assets with the intention of refurbishing and repositioning to deliver high quality assets that are capable of being operated at net zero carbon. In addition, through the installation of solar panels, occupiers have the opportunity to generate and deliver their own source of green energy.

As a Sustainable Finance Disclosure Regulation (SFDR) Article 9 fund, LOGICs has a comprehensive climate impact framework for the refurbishment of real estate, which seeks to leverage and align with external frameworks and certifications, including the EU taxonomy, to ensure its approach to delivering climate impact is transparent and measurable. Each asset purchased will have an accelerated pathway to net zero carbon emissions through the firm’s refurbishment plans.

According to Fidelity research, brown logistics buildings are currently trading at attractive entry points, 20-30% below peak valuations in 2022. Meanwhile Western Europe is benefiting from multiple demand tailwinds including the continued growth of e-commerce and a post pandemic focus on supply chain resilience. With supply of quality logistics assets constrained, Fidelity anticipates further strong rental growth for well-located, green warehouses. These two factors combined create a rare opportunity to deliver outsized returns for modest risk over the next few years.

The news follows the launch of the Fidelity European Real Estate Climate Impact Fund at the end of 2023.

Andrew McCaffery, Co-Chief Investment Officer, at Fidelity International, comments: “The LOGICs fund launch is a great example of partnering with our clients to jointly develop solutions to meet their evolving investment needs. We are pleased to see strong and growing client interest for our climate impact strategies within real estate, supporting the energy transition in the sector through accelerating purchased assets’ pathway to net zero while offering compelling investment returns to our clients. Following a strong first close, investors will have the opportunity to invest in the Fund’s second close towards the end of the year.

“With approximately €550m of deployable capital within our real estate climate impact strategies, we are excited by the opportunity to take advantage of current market conditions and deliver strong returns as well as tangible carbon reduction within an accelerated timeframe.”

Andrew Lill, Rest’s Chief Investment Officer, comments: ““Rest is pleased to join Fidelity to launch the LOGICs fund as its cornerstone investor. We believe its focus on climate impact offers a fantastic opportunity to benefit Rest’s approximately two million members, including the more than a million who are younger than 30 and will retire into a post-2050 net-zero world.

“With logistics properties trading at attractive rates and demand for energy efficient facilities growing, we believe the LOGICs fund will drive rental yields and property values that should translate into strong financial returns while helping to speed up the path to a carbon neutral economy.”

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Notes:
[1] Figure rounded to the nearest €1m.
[2] International Energy Agency, December 2020
[3] EU Commission, October 2020Corr
[4] LOGICs will on Western European countries with a strong bias towards, France, Germany, Netherlands and the UK.

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Yolanda Beattie

The industry initiative dedicated to building gender-balance within Australia’s largest investment managers continues to grow, as Future IM/Pact announces an exclusive recruitment partner, and signs three more influential local investors.

Future IM/Pact has announced an exclusive partnership with Platinum Pacific Partners, leading financial services recruitment specialists.

Set to increase the impact of both organisations’ efforts to boost the representation of women in investment management, the partnership builds on Future IM/Pact and Platinum Pacific Partners’ shared passion for helping women launch fulfilling front-office careers.

Future IM/Pact Founder Yolanda Beattie said this partnership will accelerate Future IM/Pact’s ability to build a pipeline of future female investors who are well-placed for entry level investment roles.

“Because few investment teams recruit graduates, these roles usually require 2 to 5 years’ work experience. This strategic partnership allows us to connect with more exceptional women in key feeder roles like investment banking and corporate finance, while sharing the career insights Platinum Pacific Partners have gained over decades to help early career women land sought-after analyst roles,” she said.

Victoria Biggs and Meredith Jordan, Platinum Pacific Partners’ Founders, welcomed the partnership to deepen their impact on gender diversity in funds management.

“We see first-hand the industry’s desire to recruit more women and we know we must deepen the talent pool over time to meet the challenge. This partnership allows us to amplify our current efforts to champion female representation in finance,” Ms Biggs said.

New partners, new pathways

Separately, Future IM/Pact has welcomed three new partners to the program, in the form of the $70 billion profit-to-member super fund Rest, $19 billion international equity manager Platinum Asset Management, and leading private wealth manager LGT Crestone.

LGT Crestone Chief Operating Officer Michelle Inns said the firm was delighted to join Future IM/Pact as the first wholesale investor investment advice business.

Ms Innes added, “Investing on behalf of family offices, high net worth investors and for- purpose organisations presents incredible career pathways for women. Future IM/Pact helps us grow our female talent pool so we can continue to build high performing and diverse teams.”

Platinum Head of Investments Douglas Isles added the partnership with Future IM/Pact will help Platinum support more high potential women to launch an investing career.

“Thinking differently is the cornerstone of our investment philosophy and gender diversity is one way we can bring new perspectives to find the best investment ideas. We’re excited to join Future IM/Pact and are eager to play a leading in role in helping young women to build an investment management career,” Mr Isles said.

Rest Chief Investment Officer Andrew Lill said the profit-to-member super fund would use its partnership with Future IM/Pact to provide further opportunities for young women aspiring to investment management careers.

“Rest represents more than one million women in our membership, and are dedicated to promoting greater gender equality. Our partnership with Future IM/Pact builds on our existing program of offering internships to women in actuarial studies, while also helping us source great female talent for our investment team. It’s also consistent with Rest’s commitment to contribute to five of the UN Sustainable Development Goals, including ‘Gender Equality’,” said Mr Lill.

“Widespread industry collaboration is essential for tackling the entrenched structural and cultural barriers that stop women from becoming professional investments. With 23 partners now working with us to address these issues, we’re better placed than ever to shift the dial on this issue,” Ms Beattie said.

Since launching in 2018, Future IM/Pact has provided over 350 women with experience working in investments through its virtual intern program, mentoring circles, investment competition and intern and grad placements with partners.

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Rest will implement Charles River IMS to support their internally managed investments as well as their ‘whole-of-fund’ requirements, leveraging the Charles River Investment Book of Record (IBOR) for realtime cash and positions. Rest will use Charles River to support and deliver a transparent view and workflow across their business, including portfolio construction, decision support, risk, collateral management, order management and compliance.

“The platform’s flexibility and scalability will enable us to automate processes and achieve efficiencies at this time as we build a global best practice internal investment capability. Combining internal and external investment management in one desktop system will allow us to focus real-time on achieving strong long-term returns for our members,” said Andrew Lill, Chief Investment Officer, Rest.

“Charles River continues to build a strong local presence in Melbourne which is critical to supporting our growing client base in the superannuation sector,” said Cameron Field, managing director – Asia Pacific, Charles River Development. “The adoption of Microsoft Azure as the cloud platform for our SaaS deployment delivers compelling benefits for this market such as the ability for clients to rapidly deploy new products and services, ease of increasing data and computing capacity, as well as a suitable approach for addressing data residency concerns.”

State Street currently provides Rest with custodial services as well as their data management solution State Street Alpha℠ Data Services.

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Lill will be responsible for leading the investment management teams in the Asia-Pacific region. He will also contribute to Morningstar’s global investment management committees, policies, capabilities, and thought  leadership. Based in Sydney, he reports to Daniel Needham, Morningstar’s Global Chief Investment Officer.

“We’re pleased to have Andrew on board,” Needham said. “His extensive background in investment  management, consulting and advice, asset allocation, portfolio construction, and related fields will enable him  to make a major contribution to our goal of building a leading global investment management business.”

Lill has 20 years’ experience in advising and managing institutional funds and investment teams in Australia, Asia, and the United Kingdom. He worked most recently at AMP Capital Investors as Head of Investment Solutions in the Multi-Asset Group, and before that, Head of Investment Specialists, Listed Assets.

He previously spent seven years with Russell Investment Group, as Director of Consulting – Asia-Pacific and ultimately as Director of Investment Strategy. His experience in the United Kingdom included roles in manager research with investment consultant Lane Clark & Peacock and as an investment analyst with Watson Wyatt. He has bachelor’s and master’s degrees in economics from Cambridge University and is a Fellow of the UK Institute of Actuaries.

“I look forward to contributing to Ibbotson and Morningstar Investment Management’s goal of creating better pre- and post-retirement investment outcomes for institutions, advice groups, and their clients in Australia and the Asia-Pacific region,” Lill said.

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