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Nordea to soft close climate fund

Nordea Asset Management is to soft close its Global Climate and Environment Fund after assets under management grew 500% in two years to more than €6bn.

The group said the Nordea 1 – Global Climate and Environment Fund had seen “rapid growth” and therefore the fund will be soft closed on 26 February to protect the interests of shareholders and their future returns.

Launched 12 years ago, the fund aims to achieve long-term capital growth through a diversified portfolio of equity or equity-related investments in companies, which are expected to benefit either directly or indirectly from developments related to environmental challenges such as climate change.

It is managed by Henning Padberg and Thomas Sørensen, with the latter commenting: “We have been truly humbled by the trust that investors around the globe have placed in both Nordea and our Global Climate and Environment solution. Protecting our clients’ interests remains our top priority.”

Rapid acceleration

According to FE Analytics, assets were steady at €1bn for some time until the end of December 2019, when the vehicle started to see further inflows.

Despite the volatility seen in 2020 due to the coronavirus pandemic, the fund’s assets continue to grow and stood at €6bn at the end of January.

The fund is top quartile over one and three years, returning 24% over the past 12 months to 29 January, compared to the IA Global sector’s average return of 13%, according to FE Analytics.

For the fund to avoid growing much further in size, the board of directors of the Nordea 1 Sicav decided, as of 15:30 CET on 26 February 2021, that any request to subscribe or switch shares of the fund by an investor who is not a shareholder of the fund will not be accepted.

However, an existing shareholder in the fund may still subscribe, switch, and redeem shares.

Sustainable funds saw “stratospheric” growth in 2020, according to Morningstar, with global inflows climbing 88% to $152.3bn in the final quarter.

Assets under management in global sustainable funds topped $1.65trn as of the end of December, up 29% from three months earlier.

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