DWS has launched its new institutional ESG Infrastructure Debt Fund (EIDF), which will focus on European sustainability themed infrastructure sectors which contribute towards making society and economies more sustainable.
ESG will play a key factor in all strategic allocations for the fund, targeting sectors including: renewable energy, digital, energy efficiency/utilities, clean mobility/transportation and social infrastructure. It will make 10-15 private infrastructure debt investments (loans and notes) with circa 70 per cent across senior debt, and circa 30 per cent in junior debt with a positive ESG contribution essential for the investment decision making process. With the aim to deliver sustainable returns, it will target net yield income of 3.5 per cent per annum (4.0 per cent gross) and receive favourable Solvency II treatment.
DWS has received the highest rating from independent ESG ratings and research agency Vigeo Eiris on the alignment of EIDF with the definitions of sustainability activities by internationally recognised standards.
“EIDF was launched in response to clear investor demand for infrastructure, for debt, and for sustainable products. We believe insurance companies, pension funds and investors looking for a source of duration, diversification and return premium in a low-yielding, fixed income environment will be particularly interested in this fund,” says Sundeep Vyas, Head of Infrastructure Debt, Europe at DWS.
“Covid-19 has accelerated a number of key trends, particularly the focus on sustainability. With assets in the ESG space at the forefront of our society and supporting megatrends of the future, we are extremely proud to be a first mover in this space. Investors have the opportunity to use their capital to drive concrete societal change,” concludes Hamish Mackenzie, Head of Infrastructure at DWS.
