BNP Paribas Asset Management launches BNPP Environmental Infrastructure Income Fund

BNP Paribas Asset Management (‘BNPP AM’) announces the launch of its BNPP Environmental Infrastructure Income Fund leveraging the ‘Environmental Strategies Group’ long-standing expertise in environmental themed investing as it continues to build out its product offering.

The Fund will invest globally in listed and critical environmental infrastructure covering Power & Digital Infrastructure, Water & Waste Management as well as Transportation Infrastructure offering clients a long-term secular theme with significant tailwinds from maintaining and upgrading critical infrastructure benefiting from significant investment programs announced recently in Europe and the US to promote a resilient infrastructure and energy security.

With a focus on defensive listed infrastructure and attractive dividend income, the fund invests in companies that typically benefit from regulated returns and long-term contracts, inflation-adjusted revenue streams, earnings visibility and importantly, are less sensitive to the economic business cycle than the broader market.

Main characteristics:

• Diversified & Defensive: Focus on defensive environmental infrastructure companies that benefit from rising demand for power and related grid infrastructure; significant growth in data centres and related infrastructure; companies driving upgrades in water and waste infrastructure as well as improving global transportation infrastructure

• Environmental Focus: Unique SFDR Article 9 listed infrastructure fund focused solely on critical listed infrastructure that is less sensitive to changes in economic activity and changes in business cycles avoiding more cyclical infrastructure related to fossil fuels and more discretionary social services and infrastructure

• Quantitative Portfolio Construction: Benefits from the team’s distinct quantitative capabilities and development in portfolio construction and factor alignment with specific optimisation on high dividend yield, high earnings visibility and low volatility

• Country & Sector Exposure: A global fund with a focus on Europe & US with companies typically sitting in Utilities and Industrials GICS sectors.

The Environmental Infrastructure Income Fund consists of a diversified portfolio of about 70-90 holdings, from a universe of ~350 global companies, that focus on environmental infrastructure projects across the fund’s three core themes.

The fund is jointly managed by the Co-Heads of the ‘Environmental Strategies Group’, Edward Lees and Ulrik Fugmann, who both have more than +25 years’ deep industry experience in managing investments across power, water, waste and related infrastructure globally.

The launch of BNP Paribas Environmental Infrastructure Income Fund complements BNPP AM’s specialised ‘Environmental Strategies Group’ existing range of funds that now offer a range of diversified range of investment outcomes from its highly innovative and benchmark-agnostic BNPP Clean Energy Solutions Fund to our regional, BNPP Global, Europe and Emerging Markets Environmental Solutions Funds offering highly benchmark-aware strategies with environmental positive investment outcomes leveraging the team’s Article 9 investment capabilities and proprietary quantitative portfolio construction tools to achieve this.

BNPP AM is ranked second globally in active thematics, when considering AUM in this area.

Ulrik Fugmann & Edward Lees, Co-Heads of the Environmental Strategies Group at BNP Paribas Asset Management

“Global environmental infrastructure unifies the world’s most pronounced megatrends of bolstering energy security, enabling exponential digital innovation, catering for changing demographics and population growth and not least, secure a positive environmental outcome. This secular growth is underpinned by the $69 trillion required to maintain and upgrade critical infrastructure by 2035, underscoring the immense investment opportunities in this space by investing in the key beneficiaries. With governments like Germany and the US launching ambitious infrastructure funds and acts, such as the €500 billion infrastructure fund and the $2.3 trillion Infrastructure and Jobs Act, the stage is set for a new era of critical environmental infrastructure development. Investors can capitalize on this trend through listed infrastructure, which offers a compelling combination of defensive characteristics, attractive dividend yield, earnings visibility and stability, and access to the world’s leading infrastructure companies, all while navigating the complexities of aging infrastructure in need of upgrading and replacement.”

Key fund characteristics

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