L&G launches private debt funded nature strategy
L&G has committed $235m (£183m) to nature conservation and sustainable development in emerging markets through its new nature and social outcomes strategy.
This means that to date, the asset manager has committed $1.1bn in private debt financing for emerging market sustainability projects around the world.
The launch of the new nature and social outcomes strategy further diversifies L&G’s private markets platform, expanding its commitments to addressing the funding gap faced by developing countries, the firm said.
The $235m investment was made through L&G’s Future World Multi-Asset Fund and Retirement Income Multi-Asset Fund. Both of these funds are held within L&G’s main default Target Date and Lifetime Advantage Fund ranges, which are available to 5.5 million UK defined contribution (DC) members.
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“We’re delighted to be launching our nature and social outcomes strategy as an opportunity for DC members to gain exposure to a fast-growing and impactful part of the global debt market,” said Jesal Mistry, head of DC investments, asset management, L&G.
“Today’s announcement is a great example of the increasingly diverse range of assets that DC schemes can invest in, combining the need to unlock financing where it is often most needed with the aim of delivering positive returns for members in retirement.”
The strategy deploys capital through projects that aim to deliver strong commercial returns alongside positive nature and social outcomes. Indicative projects will target habitat and biodiversity conservation, as well as socially beneficial infrastructure to support education, healthcare, and access to clean water.
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L&G completed its first direct investment for the nature and social outcomes strategy in December 2024 with an investment in Ecuador’s second debt conversion for nature.
“Exposure to emerging markets has the potential to offer attractive returns for investors whilst aiming to support communities and ecosystems which play an indispensable role in upholding economies across the globe,” said Jake Harper, senior investment manager, asset management, L&G.
“Innovative debt financing allows investors to allocate to nature conservation and sustainable development in EMs whilst benefitting from an improved credit rating and higher returns.
“By leveraging our proven track record and long-standing industry relationships, we believe L&G has distinct access to diverse investment opportunities and is advantageously positioned to shape future transactions in the sector.”
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