L&G to launch passive Global Environmental Enterprise fund

Legal & General Investments is launching a passive fund investing in global equities focused on providing solutions to energy, resources and environmental issues.

The Global Environmental Enterprise fund has been launched in conjunction with Osmosis Investment Management, who specialise in environmental opportunities.

The fund is benchmarked against the 100 stocks in the Osmosis Climate Solutions index, and will be run by LGIM's Robert Dowling, also in charge of the group's Global 100 Index trust and Global Emerging Markets Index fund.

The fund is set to be launched on 16 June with LGIM injecting £30m in seed capital.

It will sit in the IMA Global sector and will look to profit from companies which are pumping capital into climate change solutions.

L&G Investments managing director Simon Ellis said the product is not designed to be an ethical fund, with the group looking to capture the theme of climate change as opposed to using a screen to invest in ethical businesses.

He said the fund will tap into industries which are developing innovative solutions to the issues and opportunities created by global climate change.

"The fund will invest in three global climate change themes; companies which derive the majority of their revenues from energy efficient, low carbon energy production and water, waste and pollution control," said Ellis.

"The vehicle is not a green fund as instead we are looking to make a lot of money from investing in these global growth companies, so we are not screening any of the holdings."

Ellis said the universe the fund is investing in is not widely owned.

"We think this is an under-invested area. According to HSBC, the annual revenues of the energy efficiency and low carbon energy production market is $740bn, yet UK funds have less than $20bn in this space, which represents a huge investment opportunity."

The fund has an AMC of 1.25%, with no initial charge.