Anders Persson

Global Credit strategy is the fourth in Nuveen’s fixed income impact range

Nuveen, the $1.2tn global asset manager, has launched a Global Credit impact strategy with the aim of generating long term returns while seeking to create a direct, measurable social and environmental impact. It has been launched with investment around $170 million from a range of global investors, including Gjensidige Pensjonsforsikring^[1] and Nuveen’s parent company TIAA.

The Global Credit impact strategy, which is the latest in a series of launches from Nuveen’s $413 billion fixed income platform, draws upon the firm’s deep sector expertise and long history of managing fixed income portfolios focused on sustainability.

It will seek to provide investors with access to investment grade corporates and other credit sectors designed to deliver alpha and total return. Investments in the portfolio will include exclusive use of proceeds benefiting environmental or social outcomes, and from issuers with commitment and an ability to deliver transparent impact reporting. It will aim to address real world issues such as access to affordable housing and community development, as well as environmental issues ranging from climate change to the regeneration of natural resources.

Nuveen’s ability to be at the cutting-edge of responsible and sustainable investment across fixed income is driven by its proprietary impact investing framework and its proactive engagement with issuers. The framework, which was established in 2007, identifies impact investments across global fixed income markets based on a range of direct and measurable criteria.

Alongside Nuveen’s parent company TIAA, Gjensidige’s decision to invest is further testament to Nuveen’s deep understanding of the fixed income impact market, having been at the forefront of product innovation over the years. This includes, but is not limited to, being anchor investors to the World Bank’s Rhino Bond, the Seychelles Blue Bond, Barbados Blue Bond and, most recently, the Amazon Reforestation Bond.

The strategy will be co-managed by Portfolio Manager Jessica Zarzycki and Stephen Liberatore, Head of Fixed Income Impact.

Anders Persson, CIO of Global Fixed at Nuveen, commented: “Growing our fixed income platform and specialist range are cornerstones of our continued international expansion as a truly global asset management business. Nuveen has a deep history of being at the forefront of product innovation, from our founder John Nuveen pioneering the municipal bond market as a means of financing US infrastructure, to our work in green, blue and orange bonds in recent years. This launch is just the next step in Nuveen’s continued growth in terms of offering alongside further partnering with like-minded investors across the world who share in our vision of investing to make an enduring impact on the world.

Jessica Zarzycki, portfolio manager of the Global Credit impact strategy, added: “The strategy will seek to not only consistently outperform the global corporate bond market on an excess and risk-adjusted basis, but also aim to lower the cost of capital for environmental and social projects by funding initiatives through the easily accessible, liquid public fixed income markets. We are encouraged by the level of client interest in the strategy at launch and their belief in our position as an innovator in impact investing.”

Åge Sætrevik, chief investment officer at Gjensidige Pensjonsforsikring, said: “We had been searching a like-minded partner for our global impact credit allocations long before launching sustainable pension profiles in Norway two years ago with the goal of broadening our SFDR Article 9 offering and having a positive world impact. By partnering with Nuveen to invest in the Global Credit Impact strategy, we are providing our clients with innovative, sustainable pension saving options different. Since launching the service, we have seen strong interest and are encouraged by how highly valued the impact sector is to our clients.”

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Notes:
[1] A wholly owned subsidiary of Gjensidige Forsikring ASA; a leading general insurance company in the Nordics aimed at the life- and pension business, focused on sales of defined contribution plans.

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Anupam Damani

Nuveen, the global investment manager with over $1.2 trillion in assets under management, announces the launch of a Global Core Impact Bond strategy.

Drawing on Nuveen’s 50-year legacy in responsible investing, the strategy offers an actively managed, multi-currency global bond portfolio that invests across global fixed income markets. The strategy follows the well-established ESG/impact investment process established in 2007 by Stephen Liberatore, Head of ESG/Impact – Global Fixed Income. As is the case for the (US) Core Impact Bond and Short Duration Impact Bond strategies, the Global Core Impact Bond strategy will direct capital to best-in-class ESG leading issuers and securities that provide direct and measurable environmental or social impact.

The strategy will be co-managed by Liberatore, Anupam Damani, Head of International and Emerging Markets Debt, and Jessica Zarzycki, co-portfolio manager for the existing ESG/impact fixed income accounts.

As an early adopter, with a strong history, of impact investing, Nuveen has a long track record of putting capital to work for both people and planet. The strategy harnesses Nuveen’s proprietary public fixed income impact framework, including transparent use of proceeds and annual disclosure of measurable outcomes, to ensure positive impact. The strategy will direct capital at the following impact themes: affordable housing; community and economic development; renewable energy and climate change; and natural resources.

The strategy is further defined by its allocation to ESG Leaders. Taking a best-in-class approach, the team invests with issuers who are setting an example for others in their industry or market sector with respect to material ESG risks and behaviors. Unlike other ESG strategies that may consider or integrate ESG factor analysis to value securities and price risk, ultimately investing in ESG laggards or material ESG risk when they feel appropriately compensated, this strategy seeks to avoid investments in such securities – regardless of price.

As is customary for global, multicurrency fixed income strategies with a total return objective, the team will seek investment opportunities across the broad bond market. The strategy may allocate up to 40% in emerging markets and 15% in high yield, at the managers’ discretion. It will launch with $25M of seed capital.

Commenting on the launch, portfolio manager Stephen Liberatore said: “Significant investment is needed to combat some of the key issues our society faces, including climate change, global inequality and chronic housing shortages across the world. Yet the perception – an inherently false one – is that impact objectives either require a performance sacrifice or can be pursued only through private strategies.

“We firmly believe public markets, and in particular the fixed income space given its size, can offer investors attractive risk adjusted returns, while ensuring they have a measurable societal and environmental impact.”

Andrew Kleinig, Managing Director, Head of Australia, commented: “The global pandemic has brought to the fore the need to tackle social and environmental issues head on. In response, we are seeing increasing demand from our clients for investment solutions that offer both returns and tangible impact. We can make real progress in areas such as affordable housing and community development, by investing in a range of public fixed income sectors where proceeds can be tied to specific projects or initiatives or are used to fund entities fully engaged in such efforts. This appeals to clients globally, as they seek to align their investments to specific outcomes.”

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