Launching the fund on Monday, Apostle said it offers exposure to global carbon markets for “sophisticated and institutional investors”.
Apostle added that the fund aims to outperform a global carbon benchmark by at least 2 per cent p.a. net of fees over rolling five-year periods.
Luke Donovan, partner, global carbon markets at Apostle, said: “Apostle’s Global Carbon Credit Fund offers sophisticated investors the opportunity to take an active role in the global decarbonisation, now. We are pleased to bring this solution to the market amid extensive investor demand.
“Compliance carbon markets have a strong outlook and are an essential component of a low-emission economy. These markets are regulated and mandated by governments worldwide, with oversight and control mechanisms in place to ensure integrity and scalability.
“Our fund provides a robust return outlook and diversification with other asset classes while also serving as a hedge against climate risk and inflation.”
The wholesale unregistered fund is actively managed with diversification across California, Europe, the UK, New Zealand and Australia, which Apostle said offers investors “holistic exposure to the carbon price and helps reduce volatility through jurisdictional diversification”.
The Apostle Carbon Credit Fund benchmark provides investors with beta carbon price exposure to both established and emerging carbon markets and is constructed using a mixture of physical credits and futures.
“We believe a ton of carbon is a ton of carbon — regardless of the country it is from. This is why we’ve chosen the breadth of markets and why the benchmark is constructed with even distribution across each market,” Mr Donovan said.
“It’s clear that in order to incentivise the type of transition needed in our economy, the price of carbon needs to be higher.
“Institutional investors have an important role to play in this process, by participating in compliance carbon markets, they increase liquidity and sophistication which ultimately drives greater price discovery.
“High-functioning compliance carbon markets are a key pillar to the efficient and timely allocation of capital in the race to reduce emissions in our economy. This is what we are offering.”
Apostle said that while each country operates its own mechanism, it is expected that carbon prices will converge over time to create a global cost of carbon. By establishing markets and setting a price on carbon like a commodity it will incentivise large polluters to make the changes to their business.
Apostle’s managing director, Karyn West, commented: “This fund has been a long time in the making and complements our other ethical investment strategies.
“Connecting pools of capital with the problems that face our economy is critical to progress and is core to our business, which is why we are pleased to bring this fund to market.”
