GLG Partners To Subadvise Climate Change Fund

Jan 21 2008 | 11:15am ET

GLG Partners, the $23 publicly traded billion hedge fund operator, is subadvising on a long-only green fund marketed to retail investors that mirrors its own Environment Fund.

The new Virgin Climate Change Fund, launched by Virgin Money, the financial services arm of Sir Richard Branson's Virgin Group, will only invest in companies with “lighter-than-average environmental footprints for their sector.”

At least 75% of the fund will be invested in an environmentally filtered basket of European shares—only companies with a better-than-average environmental footprint for their sector will be selected. Up to another 15% will be invested in companies adopting environmental best practices, and the remaining balance will be invested in companies that offer solutions to environmental problems.

Virgin has teamed up with GLG Partners and environmental research organization Trucost, which will provide the environmental data.

GLG’s Environment Fund returned 7.02% net of fees last year compared to the MSCI Europe Index’s return of 1.62% for the same period. Like the new Climate Change Fund, the companies in GLG’S portfolio are chosen from a performance and then environmental standpoint where no industry is excluded. Companies currently held in the GLG Environment Fund include BG Group, Xstrata and Renault.

"Companies which do not adapt to changes in public opinion on environmental impact could see their returns suffer in the future,” said Pierre Lagrange, co-founder of GLG and adviser to the Virgin Climate Change Fund. "Governments and regulators are likely to increase costs for companies which do not take into account environmental impacts and encourage those that do with subsidies and tax breaks.”

The Virgin Climate Change Fund, which begins trading today, is open to investors with minimum investments of £50 a month or a £500 lump sum.

There are no initial charges, but there is a 1.75% annual management fee and a 20% performance fee.

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