Pathfinder has opened up a recently launched wholesale ‘green bond’ strategy seeded with a “substantial investment” by a well-known NZ philanthropist to the retail market.
The Pathfinder Green Bond Fund launched last year as a wholesale vehicle backed by seed client, Anna Stuck – ex-partner of Xero founder, Rod Drury – but is now available in retail format and will fill the global fixed income slot in the manager’s KiwiSaver diversified strategies.
UK-based company, Affirmative Investment Management (AIM), runs the underlying portfolio of ‘green’ bonds that are linked to sustainable projects such as clean energy and public transport initiatives. AIM was acquired by US life insurance giant, MetLife, in December 2022.
Founded in 2014, AIM has just over US$1 billion under management across three core strategies and tailored portfolios.
Colonial First State (CFS) launched an Australia-domiciled AIM fund in 2018, reporting almost A$160 million under management as at the end of last year. Since inception, the CFS AIM fund has returned an annualised -4.18 per cent after fees compared to the benchmark -3.17 per cent.
However, while the Pathfinder NZ dollar-hedged green bond fund shares some of the same underlying assets as the CFS AIM fund, the portfolio mix varies.
In a statement, Pathfinder chief investment officer, Paul Brownsey, said the new green bond fund supports growing demand for “Kiwi investor involvement in financing global projects that have environmental and climate benefits”.
“Greenwashing is also a concern in the financial sector, so transparency around the impact of the fund is deeply important to us,” Brownsey said. “We will provide comprehensive annual reporting of the Green Bond Fund portfolio’s environmental impact alongside the financial.”
Stuck said the Pathfinder AIM-managed fund fit well with her broader philanthropic interests. She founded social impact funding organisation, the Clare Foundation, in 2020, and co-founded the sole women-only private equity firm, Even Capital, the following year.
“Having a positive impact on climate change at a global scale through the most progressive Green Bond Fund in New Zealand was very attractive to me as an investor,” Stuck said in a release. “It’s an incredible opportunity for Kiwis to get behind initiatives with tangible results that will make a difference for generations to come.”
Pathfinder lowered the minimum investment threshold from $5,000 to $1,000 for all its retail funds at the same time as rolling out the green bond fund (priced with a total annual fee of 0.6 per cent).
The green bond fund will also sit in the Pathfinder diversified KiwiSaver funds, which have a target global fixed income asset allocation ranging from about 9 per cent for the growth portfolio to more than 30 per cent for the conservative option.