18-12-2020 08:30

New investment fund taps fresh business potential while supporting social progress

Amid high global demand for positive social solutions, Nordea has launched its first fund that targets positive social impact.
Young worker leaning on pallet jack at warehouse

Nordea’s family of sustainability-linked funds is welcoming a new member: the Global Impact Fund. This new fund gives investors the opportunity to get attractive returns while helping to fund solutions to the world’s most pressing social problems.

“There is a fundamental need to address the social issues facing society today. Companies that offer solutions to these problems represent a compelling proposition for investors,” says Thomas Sørensen, Portfolio Manager in Fundamental Equities at Nordea, who is managing the fund together with Portfolio Manager Olutayo Osunkunle.

“We believe social empowerment is the next theme investors will turn their attention to as they seek to have a positive impact whilst achieving attractive returns,” he continues.

High investment demand

The United Nations estimates that the equivalent of 4-6 trillion euros per year is needed to achieve the sustainable development goals set by the worldwide organisation for 2030. So far, only half of this amount has been invested. At the same time, social issues are on the rise, made worse by the COVID-19 pandemic and ongoing climate change.

The implications have not been lost on Nordea’s asset managers. Thomas Sørensen was part of the team spearheading Nordea’s flagship climate investment fund, Climate & Environment. He compares the founding of the new social fund to what the team did back in 2008 when they launched Climate & Environment.

“The universe for the Global Impact Fund is as big as the Climate & Environment universe,” he says. “This new fund has the same potential as the Climate & Environment Fund – where total assets under management have now passed 5.5 billion euros.”

Wide variety of solutions

Unlike the majority of its market rivals, the Global Impact Fund sees “social” in the broadest sense, covering solutions for anything from basic human needs to greater social empowerment. The businesses selected for the fund include a US fertility treatment provider, a German affordable property company and a Kenyan telecommunications firm.

Thomas Sørensen is pleased with the progress so far: “We’ve been able to hit the ground running with this new fund, not least thanks to all the experience gained from designing, launching and managing its Climate & Environment counterpart.”

The new fund’s first customer

Nordea Life & Pensions Norway will be the first customer of the Global Impact Fund. For Sigrid Wilter Slørstad, Head of Sustainable Investments at Nordea Life & Pensions Norway, the appeal of the new fund was obvious: 

“We decided to invest 100 million euros in the fund because the prospect of getting attractive investment returns for our pension holders while doing something good for society really resonated with us. It’s both a good business opportunity and an opportunity to support good businesses.”

Markets and investment