Redwheel UK Value and Income Team launches UK Climate Engagement Fund to deliver investment returns with overarching climate aim

Redwheel, the specialist independent investment manager, today announced the launch of the Redwheel UK Climate Engagement Fund.

This new UCITS fund will be managed by Redwheel’s established UK Income & Value team in accordance with Article 8 SFDR. The fund aims to provide an income and capital return consistent with the team’s historic approach, with a key differentiator being the incorporation of an explicit climate aim pursued through active engagement, to align companies with the Paris Agreement.  John Teahan will lead the strategy with support from Nick Purves and Ian Lance.

Combining an in-depth climate assessment framework with active engagement, the team will invest in a concentrated, high conviction portfolio of UK stocks, seeking to progress transition plans with carbon intensive companies.

John Teahan, Lead Portfolio Manager, UK Climate Engagement, said: “Action to mitigate climate change is critical, but the current investment industry response is not working. Divestment and exclusion may decarbonise a portfolio, but not the real world. We believe active ownership is more powerful, where investors don’t just act as passive bystanders but communicate with companies to influence and support long-term success, create value, and accelerate a realistic carbon transition.

“By integrating a specific climate aim within the fund’s objective, we have a mandate to urge companies to decarbonise effectively, at the same time delivering real-world impact. These companies are also in a prime position to take advantage of the overlooked opportunities within the climate transition as part of their decarbonisation drive. As consumer preferences and regulations change, new markets are opening up. Furthermore, companies with a low emissions profile are valued increasingly at a premium to high emitting companies, representing a compelling opportunity for investors prepared to invest in attractively valued carbon-intensive companies and push for change.”

The UK Climate Engagement strategy is supported by Greenwheel, Redwheel’s sustainability insights and strategy framework, which was announced on 30 January 2023. Greenwheel provides thematic research insights and strategy development support to Redwheel’s enhanced integration, transition and sustainable funds, and is involved at every stage of the product life cycle from initial product scoping through to day-to-day investment decision making.

Stephanie Kelly, Head of Greenwheel, added: “This exciting new fund, developed through close collaboration between the UK Value and Income team and Greenwheel, elevates climate considerations above ESG integration through the adoption of a climate assessment framework and overarching climate aim. Going forward, Greenwheel will remain a critical partner for John and the team, providing independent challenge and oversight to ensure a high level of governance for the fund, while keeping the team aware of the best practice and best frameworks with which to assess companies.”

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