ESG Hedge Fund Falters in Sweden

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The fund had only $2.46 million in assets one year into its operations

Handelsbanken Fonder will shutter its ESG hedge fund Handelsbanken Hållbarhet Hedge on September 5, according to a letter to investors.

Despite increasing demand around the globe for ESG strategies, the Swedish asset manager cited low client enthusiasm. Launched in February 2018, the fund’s manager Viking Kjellström didn’t get a lot of time to make an impression. The fund had AUM of just €2.2 million ($2.46 million) at the end of July July 2019.

The ESG hedge fund falters

Handelsbanken Fonder closed the market-neutral fund and removed all fees. It focused on investments that would benefit from the continued shift of populations to more sustainable technologies, commodity procurement practices, and healthier lifestyles.

The fund had focused on a variety of ESG themes like electric vehicles and renewable energy and excluded companies that generated more than 5% of their revenue from cluster bombs, chemical or biological weapons, and nuclear weapons.

It also shunned assets like tobacco, alcohol, coal, pornography, and gambling. According to the fund’s strategy, it was allowed to short oil, gas and coal companies – but not own them if their businesses relied on generating a profit from these carbon-intensive industries.

ESG hedge funds still very popular

As we noted in July, ESG hedge funds remain popular among managers around the globe.

According to a Barclayhedge survey, more than 50% of hedge funds will tie their masts to ESG criteria in 2019.

The figure will jump from 42% last year to 58% by the end of 2019, the survey suggests.

 

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