The European financial institution (FI) focus of the GAM Sustainable Climate Bond strategy helped the €16 million ($17 million) fund seal the Green bond fund of the year award in only its first full year of existence.
The fund – launched by the CHF75 billion ($82 billion) asset manager in August 2021 – is focused predominantly on investments in green and sustainability bonds issued by European FIs, in particular banks.
Atlanticomnium research head Romain Miginiac – co-manager of the fund – and GAM sustainable and impact investment head Stephanie Maier told Environmental Finance that this bias offers "tremendous impact potential" as FIs finance the bulk of the economy. As a result, they argue green bond investor engagement with FIs can be passed on by the banks themselves to clients as a "catalyst for the whole economy to transition".
"While green bonds are typically issued by large corporates, proceeds from green bonds from banks will be channelled to a wide range of stakeholders including SMEs or individuals – a unique opportunity in the green bond market," they said.
Environmental Finance Bond Award judges agreed, arguing it was an "interesting" and "thoughtful" strategy to use FI green bonds to channel green finance to a broader pool than the large corporate green bond issuers.
Judges also praised GAM for its "great" impact reporting which not only includes data granularity but also makes use of third-party environmental data from Carbone 4 tore-estimate the environmental impact of each individual investee project financed by the FI green bonds.
Looking forward, Miginiac and Maier said they are keen for FIs to expand green bond use-of-proceeds beyond the common energy, transport and green building categories – such as for biodiversity or climate adaptation. In addition, they are also keen for European FIs to begin to use subordinated green bonds more frequently alongside their senior bond issuance programmes.
GAM also won the Award for impact reporting in Environmental Finance's IMPACT 2022 awards.
Key fund details
Fund Name: GAM Sustainable Climate Bond
Assets under management: €16 million
Launch date: 3 August 2021
Managers: Romain Miginiac, Gregoire Mivelaz and Patrick Smouha
Top 10 holdings (as of 28 February 2023)
|BBVA (2099, subordinated)||6%|
|ING (2033, subordinated)||5.4%|
|Abeille Vie (2033, subordinated)||4.5%|
|Westpac Banking (2031, subordinated)||4.3%|
|CNP Assurances (2053, subordinated)||3.7%|
|De Volksbank (2099, subordinated)||3.5%|
|Axa (2041, subordinated)||3.3%|
|Storebrand (2051, subordinated)||3.2%|
|ABN Amro (2030, senior unsecured)||3.1%|
|De Volksbank (2030, subordinated)||2.9%|