BlueBay Asset Management has launched a new fixed income ESG (environmental, social and governance) strategy, the company has announced.
The BlueBay Global High Yield ESG Bond fund, will be a sister fund to the existing BlueBay Global High Yield Bond fund. It will be managed by Justin Jewell and Thomas Kreuzer who are both co-heads of global leaveraged finance.
Domiciled in Luxembourg, the new Ucits structure will be available for sale in Luxembourg, Norway, and Switzerland.
Launched due to client demand for a greater incorporation of ESG into fixed income investment strategies, the new fund will offer investors a more dedicated ESG strategy.
BlueBay has been working with global investment consultants Mercer and PKH, to establish an investment strategy focused on investment returns in a high yield asset class, whilst including ESG analysis.
The investment strategy applied to the new fund will incorporate the ESG investment policy of the Norwegian Government Pension Fund Global fund, managed by Norges Bank.
The strategies encompass product based screening on controversial weapons, tobacco, and coal-based energy, as well as conduct based screening, integration and engagement.
Commenting on the launch, chief investment officer at BlueBay, Raphael Robelin said: ‘BlueBay was founded in 2001 in response to new opportunities in the debt market. Our strength is in our pro-activeness in anticipating the needs of our clients and market trends.’
‘Fifteen years on, we believe we are facing the start of another important market development – the application of ESG investment strategies to the debt asset class.’
‘The launch of this ESG offering illustrates BlueBay’s ongoing commitment, as a specialist fixed income manager, to incorporate ESG and demonstrate innovative and proven new approaches to investing across the asset class.’
The BlueBay Global High Yield Bond fund returned 12.07% in US dollar terms, over the three years to the end of January 2017. This compares with an 11.80% rise, by its Citywire-assigned benchmark, the BofA Merrill Lynch Global High Yield TR, over the same time period.