Asset Management

What's New In Investments, Funds? – HSBC AM, Lombard Odier, Octopus Titan VCT

Editorial Staff 11 November 2022

What's New In Investments, Funds? – HSBC AM, Lombard Odier, Octopus Titan VCT

The latest news in investment offerings, financial products and other services relative to wealth advisors and their clients.

HSBC Asset Management
This week HSBC Asset Management has launched the HGIF Global Emerging Markets Corporate Sustainable Bond fund. 

The fund will be overseen by L Bryan Carter, head of emerging market debt and managed by Caroline Keany and Julio Obeso, senior emerging market corporates portfolio managers, the firm said in a statement. 

Finnish pension insurance company Varma, has made an initial investment of $50 million into the fund.
The fund aims to make a positive environmental, social and governance impact, by investing in fixed income, for example bonds and other similar securities issued by companies that are domiciled in emerging markets and contribute to the UN Sustainable Development Goals. The fund will be classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation, the firm continued.
The strategy will integrate sustainability objectives into its analysis, alongside continuous engagement, with a focus on driving positive change through proprietary engagement. Following a bottom-up investment process, individual issuers will be selected based on HSBC AM’s Sustainability Assessment – aimed at targeting the areas that require the most attention in terms of the individual company’s sustainability challenges.
This will result in a high-conviction, low turnover portfolio, the firm said, which aims to ensure robust sustainability standards within emerging markets. If a company is unable to improve the sustainability of its operations in line with its objectives and demonstrate measures to improve its sustainability, the investment will be divested.
Carter said: “Emerging markets are at the epicentre of sustainable investing, a just transition and Paris alignment. As investors, we believe direct and consistent engagement with emerging market issuers can offer opportunities for assessing their ESG plans and progress, their challenges and gaps, and to help drive positive change.”
Petri Ala-Härkönen, head of FICC at Varma added: “The fund’s investment strategy complements our emerging markets portfolio from a diversification perspective, given that it is mostly made up of government bonds. The new fund invests in corporate bonds and takes careful consideration of the related sustainability aspects and therefore deepens the consideration of sustainability as part of our emerging market investments.”
This fund follows the launch of a suite of SFDR Article 8 funds in 2021 from the HSBC AM emerging market debt team, with over $300 million now managed between ESG Hard Currency and ESG Local Currency funds.
Lombard Odier Investment Managers

Lombard Odier Investment Managers has just launched its Global Carbon Opportunity strategy, designed to capture opportunities across carbon markets worldwide. 

Global Carbon Opportunity is the latest addition to LOIM’s alternatives franchise which aligns with the CLIC® framework, the firm said in a statement.

Callum Lee joined LOIM in August 2022 as portfolio manager of the strategy, bringing his expertise in investing across compliance and voluntary carbon markets. 

Based in London, Callum was previously head portfolio manager of global carbon at Altana Wealth where he was also head of quant trading.
He will work with Lorenzo Bernasconi, head of climate and environmental solutions, and Ruben Lubowski, chief carbon and environmental markets strategist. The team, which will be supported by LOIM’s Sustainability Research teams, will have access to an independent global Expert Advisory Group, the firm continued.
The strategy combines a long-biased approach with absolute return trades and active tail risk management to generate attractive risk-adjusted returns with a low correlation to traditional and alternative asset classes. 
The firm said that net zero commitments by countries have increased four-fold and the number of companies setting net zero targets has increased nine-fold. To stay on track to meet global net zero goals to restrict a global temperature rise to 1.5C, carbon dioxide emissions will need to decrease by almost 70 per cent by 2030.
Carbon pricing and carbon markets are critical of achieving these global climate goals, and the price of carbon needs to increase substantially to meet emission reduction commitments. 
Bernasconi said: “We believe that the carbon markets are one of the most exciting investment opportunities of the climate transition mega-trend. We are seeing growing and more ambitious climate commitments, covering over 90 per cent of global GDP, and an increasing proportion of these are legally binding. Carbon markets are a mission critical policy tool for meeting government and corporate climate commitments and are trading at a deep discount to where they need to be.”
Jean-Pascal Porcherot, co-head of LOIM and managing partner at Lombard Odier, added: “Our Global Carbon Opportunity strategy seeks to capture these market opportunities, with the objective to promote the net zero transition and generate compelling sustainability-linked alpha for investors.”

Octopus Titan VCT
Octopus Titan VCT, managed by Octopus Ventures, has opened its latest offer this week, which seeks a fundraising target of up to £250 million ($292 million).

Last year, Octopus Titan’s offer closed in four weeks, raising its full fundraising target of £200 million, Wealth Club, a high net worth investment service, said in a statement. 

Octopus  Titan VCT has net assets of £1.2 billion and is currently invested in 117 companies, including some of the UK’s fastest growing technology businesses such as pet insurer, Many Pets, British satellite launch company Orbital Express Launch, and digital clinic for substance addiction, Quit Genius. 
Alex Davies, CEO and founder of Wealth Club said: “At £1.2 billion of assets, Titan is the largest and one of the most exciting VCTs open to investors. It’s done exactly what VCTs are supposed to do: pump vast amounts of money into promising UK startups to help them grow. And that approach has paid off in spades for everyone involved.” 

“Companies such as Zoopla, the first VCT-backed company to reach a £1 billion valuation, Depop, the vintage fashion app which sold for $1.6 billion dollars and Many Pets, the pet insurer, currently valued at $2 billion – all got backing from Octopus Titan,” he continued.
Over the past 10 years Octopus Titan has generated NAV total returns of 152 per cent, equivalent to a £2.52 return for every £1 invested.
Davies added: “Despite the gloomy economic backdrop, demand for VCTs remains buoyant. With expected freezes to the pension allowances in next week’s Autumn Statement and the threat of even higher taxes, we expect demand this year to continue unabated. After all, for wealthier investors VCTs are one of the last sensible tax-efficient investments left.”

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes