Tikehau Capital to launch Tikehau Impact Credit
Global alternative asset management group Tikehau Capital has launched Tikehau Impact Credit (TIC), pioneering an impact approach in the high yield universe.
The fund’s objective is to help expand impact investing in fixed income, a key step towards addressing climate change and contributing to reaching the goals laid out in the Paris Agreement. This new fund will sit alongside Tikehau Capital’s private assets impact strategies, marking another major step forward for the Group’s global impact platform.
The fund’s mission is to finance and actively engage with companies across a diverse range of sectors which have the potential to enable the global shift towards a net zero carbon economy. Tikehau Capital will leverage its impact investment expertise to define “impact cases” for each investment and help issuers go down the path towards a more sustainable future.
TIC will focus on three buckets of investments and issuers: Green or Sustainability-linked bonds or climate pure-players already involved in the energy and ecological transition (bucket A); issuers who have signed an international pledge towards climate change (bucket B); and a sector-agnostic approach to companies with the potential to contribute positively to climate change mitigation or adaptation or to reduce other highly material environmental externalities (bucket C).
TIC will build on industry-recognised standards to set key impact goals including:
• A 30 per cent carbon intensity reduction target compared to the High Yield ESG index (ICE Global High Yield ESG Tilt Index)
• A minimum 25 per cent invested in issuers highly exposed to climate change which need to accelerate their transition and where impact can be meaningful (eg manufacturing, agriculture, transportation)
• A contribution towards an annual 5 per cent self-decarbonisation by sector as a best-effort
Tikehau Capital has developed a proactive ESG-by-design approach that is embedded in its portfolio management process and is at the heart of its investment philosophy. Active and continuous engagement with issuers will also be key to help these companies accelerate their transition toward a more sustainable future.
Consistent with its policy of strong alignment of interests, Tikehau Capital has committed EUR30 million of initial capital to this fund.
Raphaël Thuin, Head of Capital Markets Strategies for Tikehau Capital, says: "We are thrilled to further expand our impact platform with the launch of our high yield impact credit fund. In 2020, commitments to reach net zero emissions from businesses have roughly doubled. The next step is now for impact investing to reach the shores of the fixed income market. We are committed to deploying an engagement strategy contributing to the global initiative for companies to achieve net zero emissions by 2050 or sooner and will seek to give our investors the opportunity to reach both ambitious financial and extra-financial goals through their fixed income allocation.”