A new impact investment trust is launching that plans to deliver the holy trinity of sustainable (if not all) investment: strong returns with low volatility while making a measurable positive impact on the world. Meet the Aberdeen Standard Global Sustainability Trust, or GST, for short.
The trust, co-managed by an army of private market and impact specialists at Scottish fund manager Aberdeen Standard Investments, is the first of it’s kind into the UK market.
This is because it offers investors the chance to buy directly into a broad range of private companies and projects in a diverse range of sectors – all of which are making a tangible, positive difference. What is more, it is targeting an average return of 6 to 8 per cent per year.
For those unversed in investment lore, this is a pretty bold move; with the private company landscape long considered far too risky for retail investors – even those interested in impact investing.
As such, many sustainable funds still invest predominantly in mainstream, publicly listed markets and companies, with the best among them doing their utmost to mitigate the worst of tobacco, fossil fuel, mining and arms-heavy global indices.
Intentional, measurable investment
However, as global investor appetite for sustainable investment has grown so has the desire to see savings do real good on the ground, which is why, ASI says, the Global Sustainability Trust was born.
Sarah Norris, investment director at the firm, explains: “Impact investing, as defined by the Rockerfeller foundation, is ‘intentional investment that delivers financial return as well as measurable – and positive – social and environmental outcomes’.
“The outcomes part of this is the most important, and why we believe private markets are the natural home of impact investing.
“While public companies have the ability to have an impact, private markets give you the ability to direct capital towards projects that are delivering outcomes that simply would not have been possible otherwise.”
Roger Pim, global head of private markets product strategy and solutions at ASI, says the team has been working on a strategy to move private impact investing into the mainstream for over four years.
The process – which is guided by the UN Sustainable Development Goals – will see the team invest in a range of grassroots projects from recyclable buildings in South America, to agricultural microfinance in Europe, to reforestation initiatives in the US.
Pim – who has been in the investment trust game for over 20 years – says he is personally excited by the project, the appetite for which among investors “surprised” him.
He says: “We did a lot of market research for this launch – speaking to big and small investors across the country – and we were repeatedly surprised by how enthusiastic they were.
“We were even directly approached by low cost platform providers keen to host the initial offering, which is quite rare. I think many investors have been waiting for an opportunity to invest in something like this – that feeds capital directly into real impact projects – for a while.”
£200 million target
The firm is targeting a raise of £200 million with its initial share offering, which will run over the next five weeks until the 12 December at a price of £1 per share. After the raise, otherwise known as an initial public offering (IPO) the trust is will list onto the London Stock Exchange.
Investors can apply for shares at www.computershare.co.uk/gst , or through a number of investment platforms, a full list of which can be found on the ASI website. The minimum investment is £500, with further shares available in multiples of £100 thereafter.
Fees for the launch are 1.65 per cent, which will be taken from investor capital, while the trust has an on-going charge of 0.70 per cent a year with no performance fee: a rarity in the private asset world that Norris says should keep the focus on responsibility, not returns.