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LGT launches sustainable corporate bond fund

LGT launches sustainable corporate bond fund

LGT Capital Partners has launched new corporate bond fund, Citywire Switzerland can reveal.

The fund is domiciled in Ireland and is currently awaiting regulatory approval in Switzerland.  

The official name of the new strategy is LGT Sustainable Bond Fund Corporate and it will be managed by Jana Benesova. She is a senior portfolio manager in the fixed income team, which already manages three fixed income funds.

Prior to joining the firm in 2016, Benesova was a global credit portfolio analyst for Stone Milliner AM in Switzerland. She also used to work in the macro trading team at Moore Capital Europe and in the European fixed income team at Citigroup.

‘Benesova spent almost all of her career in global credit covering all regions, all sectors, both investment grade and high yield. She is already managing two ESG fixed income funds that have a focus on corporate credit,’ said Sven Lang, executive director and product specialist at the firm.  

At the moment Benesova is looking after LGT Sustainable Quality Bond Fund Hedged and LGT Sustainable Bond Fund Global.

Lang said the new fund was launched because the firm didn’t previously have a pure corporate bond strategy. A corporate bond portfolio is also part of the princely strategy.

‘Jana is also managing CHF600 million for the princely strategy and other multi-asset investment solutions. This is important when we talk about the alignment of interests as the new fund has almost the same investment guidelines.’

The two benchmarks for the fund are Bloomberg Barclays EuroAgg Corporate and Bloomberg Barclays US Intermediate Corporate.

Sustainable returns

ESG is a key aspect of the company’s culture both in fixed income, private equity, hedge funds and equity portfolios. That includes Christian Scherrer’s LGT Sustainable Equity Fund Global, which won Citywire Switzerland’s award in 2017.

‘LGT has a very convincing story when it comes to ESG as it is a family owned business with long-term values. The ESG aspect is important for Prince Max and Prince Philippe who are CEO and Chairman of the group. Since 2003 it is an institutionalized part of the corporate culture,’ said Lang.

The team excludes companies that have more than 5% revenues coming from such controversial businesses such as weapons, tobacco and adult entertainment.

In parallel to that the firm has positive criteria, where it assigns an ESG rating to all the companies and after also excludes the fourth quartile of the universe.

‘Currently we are looking at 40 key performance indicators and calculate ESG score based on them. In the end we have an ESG score which is derived from a special tool called ESG Cockpit, which you can also use to do CO2 emissions reporting for your portfolio.’ 

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