Ninety One, an emerging markets manager that invests in private and public markets, is set to bring a private debt strategy focused on decarbonisation to market early next year.
The strategy will provide credit to high-emitting companies to assist them with reducing their carbon emissions, according to a statement. The firm did not disclose how the strategy will be structured, but daid it had been developed with “several global capital providers and advisers”, including Cambridge Associates and Wiltshire Pension Fund.
“The strategy is hybrid public and private, which we believe is the best way to deliver a commercially attractive risk-adjusted return while maximising real world impact,” portfolio manager Matt Christ told New Private markets. “It is an evergreen structure with quarterly liquidity, without a lock-up period. It is an investor-forward structure in that we are giving investors the benefits of private credit without the long commitment period without liquidity.”
Regarding geographical focus, Christ said: “The strategy is designed to follow the carbon. We will prioritise the emerging market countries with the largest carbon footprint and the sectors that are responsible for over 90 percent of the world’s emissions (energy, industry, transportation, agriculture, buildings). Looking at the list of highest emitting countries, we are focusing on India, Indonesia, Brazil, Mexico, Turkey, South Africa, etc. While we look for opportunities in China, the International Energy Agency has identified China as the one country in EM that has the financial capacity to finance its own transition.”