Sycomore Asset Management today (8 April) launched Sycomore Environmental Euro IG Corporate Bonds, a fund investing in bonds issued by companies supporting the energy and environmental transition, mostly from within the Investment Grade segment.
This new SFDR 9 strategy will reinforce Sycomore AM’s range of fixed income funds, which now total around €1.7bn in assets under management.
The fund will leverage the firm’s 12-years’ experience in credit markets as well as its environmental impact analysis capabilities, developed since 2015.
Stanislas de Bailliencourt, head of fixed income and asset allocation, and Emmanuel de Sinety, portfolio manager, will manage the Sycomore Environmental Euro IG Corporate Bonds fund alongside Tony Lebon, credit analyst.
They shall work closely with members of the ESG team, run by Anne-Claire Imperiale, who back the managers on sustainability issues, drawing from their specific expertise in the field.
Over the course of the in-depth, proprietary fundamental and ESG research process, the team will select corporate bonds issued in euros from within the Investment Grade universe - bonds that are mainly rated BBB.
BBB rated bonds currently make up around 70% of the portfolio. The situation may change at any time. The fund may invest up to 10% of its assets in bonds considered to be speculative grade or non-rated.
“In these first months of 2024, we believe that corporate debt offers an attractive risk/return combination, notably within the European Investment Grade credit segment”, said de Sinety, adding that “companies are currently displaying robust fundamentals”.
To conduct a holistic assessment of a company’s impact on the environment, the investment team measures its alignment with the transition using a proven indicator, the NEC - which stands for Net Environmental Contribution.
The NEC is based on 5 key factors: climate, biodiversity, water, air, and waste. The fund also meets several of the United Nations’ Sustainable Development Goals (SDGs). Furthermore, Sycomore AM’s SRI exclusions policy ensures that the fund steers clear of controversial activities. Issuers bearing high sustainability risks are also removed from the investment universe.
Sycomore Environmental Euro IG Corporate Bonds is exposed to sustainable growth themes such as: renewable energy, energy efficiency and electrification, green mobility, sustainable construction, the circular economy, natural resource management, sustainable food, responsible consumption, and eco-services.
“Sycomore Environmental Euro IG Corporate Bonds is the first fund within our credit range to be classified article 9 under SFDR and to develop a holistic environmental approach, thanks to the metric we co-developed - the NEC”, said Anne-Claire Imperiale, head of sustainability.
She added that “capitalising on our proven expertise, we have designated this highly pertinent indicator as a key investment criterion for the strategy”.
