TEEC label for the Ostrum AM infrastructures debt fund
The Essential Infra Debt Fund managed by Ostrum Asset Management was awarded the French Energy and Ecological Transition for Climate Label (TEEC) on December 18, 2018 following an audit by EY1. This label recognizes the fund’s strategy and applauds Ostrum AM’s policy to systematically factor non-financial criteria into its investment process.
Ostrum AM has developed an infrastructure finance strategy in the renewable power, waste and water treatment, green mobility and energy-efficient public building sectors, built on its deep-rooted conviction that infrastructure debt has a key role to play in energy and ecological transition.
The company launched the Luxembourg-regulated reserved alternative investment fund (RAIF)2 Ostrum Debt SCS RAIF in late 2018, which includes the Essential Infra Debt Fund compartment. Fund-raising continues in 2019 and this senior secured debt fund3 offers investors a long-term buy-and-hold4 strategy, focused primarily on energy transition in continental Europe.
France set up the Energy and Ecological Transition for Climate Label (TEEC) on the back of the success of the twenty-first session of the Conference of the Parties in Paris (COP 21), with the aim of ensuring that investment funds contribute to energy and ecological transition. The certification is awarded on the basis of an exacting set of criteria and provides afor investors who want to help fund the green economy.
Ostrum AM’s infrastructure debt strategy is part of its broader CSR policy. The company has been a signatory to the UN PRI5 since 2008 and has been singled out for excellent ratings over the past several years, while Ostrum AM also carbon-compensates 100% of its direct carbon emission. Essential Infra Debt Fund’s achievement of the TEEC label is a key landmark in this strategy and reflects the relevance of its approach.
We wanted to launch a fund that would support energy and ecological transition, so achieving the TEEC label really bears out our strategy and also provides investors with transparency on our portfolio as well as its impact. We are thrilled to be able to offer our clients the opportunity to play an active role in supporting today’s energy and ecological transition
states Céline Tercier, Head of Infrastructure Private Debt at Ostrum AM.
1 Ernst & Young Global Limited.
2 A reserved alternative investment fund does not require accreditation from the Luxembourg Commission de Surveillance du Secteur Financier (CSSF, Financial Sector Supervisory Committee) before launch but must be managed by an accredited investment manager.
3 Senior secured debt is guaranteed by specific guarantees and is reimbursed before other types of debt known as subordinated debt.
4 Buy-and-hold is an investment strategy whereby an investor buys loans and/or debt securities and holds them in the portfolio until maturity.
5 Ostrum Asset Management’s scores outstrip the median for all similar organizations, with an A+ for strategy and governance, as well as for most of its investment management range. Following a detailed reporting exercise, the Principles for Responsible Investment award a score based on a 6-level scale, for each applicable module and the peer group median is also announced to provide some context for results from a relative standpoint. The scale is rated from A+ (highest) to E (lowest). The “Strategy and Governance” Module applies to all signatories; the other modules are applicable when they cover a category above or equal to 10% of AuM.
The Essential Infra Debt Fund RAIF is reserved exclusively for professional investors as defined by MiFID, and carries a number of risks, i.e. loss of capital, performance of assets (especially construction risk and merchant revenue risk), illiquidity, risks associated with the deployment of the fund, general counterparty, macro-economic, general taxation, impacts of governmental regulation and legislative changes. For more information, please refer to the Information Memorandum.