MILLTRUST INTERNATIONAL
 

Surging Performance by The Climate Impact Asia Fund Shows the Appeal of Impact Investing

July 7, 2020

BY Alexander Kalis
MANAGING PARTNER

We are delighted to share with you that Milltrust’s Climate Impact Asia Fund, managed in partnership with Environmental Investment Services Asia Limited and in collaboration with WWF-Hong Kong, surged in June and continues its strong performance in July as at the time of writing. Contact us fo more details.

The fund’s strong performance has benefitted from:

  • Growing M&A activity in the Asian renewable energy sector, as evidenced by a takeover bidding war in the fund’s largest holding Infigen Energy between (Philippine conglomerate Ayala Corp-backed) UAC Energy and Spanish global energy leader and the world’s number-one producer of wind power, Iberdrola. Elsewhere, KKR has made a successful 11.9% tender for First Gen, another key position held by the fund. And the recent announcement of a “possible” privatization for Beijing Jingneng Clean Energy should add further positive attribution to the Fund’s NAV in the coming months.
  • Strong double-digit % returns coming from our new energy vehicle and associated lithium-ion battery investments including CATL, BYD and Samsung SDI. The future of new energy vehicles is forecast to play a major role in the post coronavirus world, and China has a long-held ambition not only to provide the supporting policies and infrastructure to encourage fast domestic adaption but also to take the lead in providing the required technology to disrupt the traditional auto market.
  • Increased incentives announced by China’s Ministry of Finance to boost its budget for renewable power subsidies to 92.36 billion yuan ($13 billion), 7.5% more than it spent last year, with solar power incentives to rise by 14% compared to last year’s level (higher than expected), which has been particularly positive for the fund’s China solar exposure holdings: Xinyi Glass, Xinyi Solar, and Xinyi Energy. In particular, as a yieldco, Xinyi Energy has a dividend yield of 5.5% which, combined with the favourable policy tailwinds, should help facilitate earnings as well as dividend growth for many years to come.

In line with its objective of generating positive impact while maximising shareholder returns, the fund’s 35 companies’ collective low carbon environmental operations are forecast to contribute a positive impact of:

  • Avoiding 354 million metric tons (MT) of CO2 emissions, equivalent to taking 86.5 million cars off the roads.
  • Distributing 5,816 MT of clean water and treating 6,382 MT of polluted water to over 42 million households every year.

The fund also proudly makes revenue-based donations to support WWF-Hong Kong’s regional biodiversity and species extinction-focused conservation programmes. WWF-Hong Kong’s latest actions have focused on preventing the local extinction of the Chinese white dolphin population (Sousa chinensis) in the Pearl River Delta.

Alexander Kalis, Managing Partner at Milltrust International and Chairman of The Climate Impact Asia Fund’s Investment Advisory Committee said: “We are thrilled that The Climate Impact Asia Fund’s low carbon climate impact investment strategy is paying off for investors while also helping the transition to a sustainable economy which future generations are so reliant on us to deliver. We need the private sector to recognise that doing good does not come at the expense of returns, and we need their action now”.

Please contact Alexander Kalis on [email protected] to schedule an introductory call or to request any more information on The Climate Impact Asia Fund.

Sources: Environmental Investment Services Asia Limited, Company Reports, Bloomberg, EPA, IRENA, Statista, MUFG and WWF-Hong Kong.

About Milltrust International

Milltrust is a leading UK and Singapore-based investment group focused on sustainable investing. Milltrust International LLP is regulated by the Financial Conduct Authority in the United Kingdom and serves as investment manager and investment adviser for a range of sustainable institutional investment solutions focused on Global Emerging Markets, Agriculture, Science, Technology & Innovation, Climate Change, and other Sustainable impact investments, structured on the Milltrust International Managed Investments ICAV Platform in Ireland and the Milltrust International Investments SPC Platform in the Cayman Islands. Milltrust has been instrumental in drafting the animal welfare section for the OECD Farmland Investment guideline and was an active participant in the ISU, an initiative of the HRH Prince of Wales.

Disclaimer

For professional investors only. This document is strictly private and confidential and is meant as guidance and information only. It is issued by Milltrust International LLP, incorporated in the United Kingdom, which is authorised and regulated by the Financial Conduct Authority. Milltrust International LLP has its registered office at 5 Market Yard Mews, 194-204 Bermondsey Street, London, SE1 3TQ, United Kingdom and is a subsidiary of Milltrust International Group (Singapore) Pte Ltd. The content in this document is for informational purposes only and does not constitute legal, tax, investment, financial, or other advice. Nothing contained in this document constitutes a solicitation, recommendation, endorsement, or offer by Milltrust International LLP or any of its affiliates to buy or sell any securities or other financial instruments. No such solicitation or offer is made in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the securities laws of such jurisdiction. All content in this document is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing in the document constitutes professional and/or financial advice, nor does any information on the document constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. It should therefore not be used as the sole basis for any investment or other decision. The use of or access to this document or content by any person does not create a fiduciary relationship between such person and Milltrust International LLP. The sole responsibility of evaluating the merits and risks associated with the use of any information or other content on this document before making any decisions based on such information or other content rests with the user and their professional advisers. The Sub-Funds of Milltrust International Managed Investments ICAV are recognised collective investment schemes under s.264 of the UK Financial Services and Markets Act 2000. The promotion of such products and the distribution of this document are, accordingly, restricted by law. Most of the protections provided by the UK regulatory system and compensation under the UK’s Financial Services Compensation Scheme will not be available. The investments described herein are only available to investors permitted to invest in the prospectus of the fund and are not available to private or retail investors. The nature of the Funds’ investments carries certain risks and the Funds may utilise investment techniques which may carry additional risk. The value of investments and the income from them may fall as well as rise and is not guaranteed. Past performance is not a reliable indicator of future performance. Any investment in the Funds mentioned above should be based on the full details contained in the relevant prospectus and supplements which are available to qualifying investors from www.milltrust.com. Notice to US investors: the shares of Milltrust International Managed Investments ICAV have not been registered under the 1933 Securities Act or under the 1940 Act; however the company takes advantage of the 3[C]7 exemption and shares are available to 3[C](1) US qualified purchasers and those qualifying under Reg D. Distribution activity in the US is undertaken by Silverleaf Partners LLC, a registered broker-dealer based in New York.

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