Lombard Odier Investment Managers launches Sustainable Private Credit Strategy
First closing with Environment Agency Pension Fund as cornerstone investor.
Lombard Odier Investment Managers (“LOIM”) has announced the first closing of its Sustainable Private Credit strategy with a commitment from the Environment Agency Pension Fund (“EAPF”). The EAPF commitment furthers LOIM’s position at the forefront of sustainable investing with a value-added private credit strategy classified under Article 9 of the Sustainable Finance Disclosure Regulations (SFDR) pursuant to its sustainable investment objective of advancing the transition to Net Zero.
The EAPF, part of the Local Government Pension Scheme (LGPS), manages assets of approximately GBP4.5 billion on behalf of active and closed pension funds of the Environment Agency (“EA”). The EA is a non-departmental public body sponsored by the United Kingdom’s Department for Environment, Food and Rural Affairs, and is the leading public body for protecting and improving the environment in England. The EAPF is a signatory to the Paris Aligned Investment Initiative, representing 53 asset owners, with USD2.9 trillion of aggregate assets, committed to achieve net zero alignment by 2050 or sooner.
The LOIM Sustainable Private Credit strategy seeks to provide primarily bilateral senior secured private loans to diversified North American climate transition-oriented industries. It is designed to deliver tailored solutions-based structured liquidity within less-efficiently financed markets, while pursuing compelling risk-adjusted returns expected to be less market correlated than traditional direct lending strategies.
Ritesh Bamania, Head of UK & Ireland Institutional Sales at LOIM, commented: “The EAPF is recognised for its strong sustainability focus and we are excited to be working together with them as a key partner. Many clients have embraced private debt to diversify away from equities and shift toward stable cashflows. Our strategy seeks to deliver both these traditional objectives and a sustainability tilt to help accelerate the transition to net zero. The UK institutional business is a key area of focus for LOIM as we expand our sustainability led investment offering. The successful first closing of this strategy and starting a partnership with the EAPF is a great validation of our sustainability expertise.”
Graham Cook, Chief Investment Officer at the EAPF, added: “The transition to a net zero global economy will be highly dependent on the targeted provision of debt financing to corporations to help them make the necessary changes to their business models. This was something the Environment Agency Pension Fund identified as a priority for investment in our net zero policy. We were delighted therefore to see the launch of Lombard Odier Investment Managers’ sustainable credit fund, with its focus on facilitating the transition using a science-based approach. We believe that the fund will provide the desired double bottom line of strong investment returns coupled with real world impact in addressing the challenges of climate change.”
Jean-Pascal Porcherot, Co-Head of LOIM and Managing Partner at Lombard Odier, added, “We are delighted that the EAPF has recognised LOIM’s expertise and credentials in sustainable investing. Peter Pulkkinen and Rhys Marsh joined LOIM last year to develop this innovative and impactful strategy, and its first closing marks an important step in LOIM’s strategic plans. We continue to further expand our sustainable investment offering across public and private markets with differentiated solutions that deliver sustainability outcomes and potentially attractive financial returns.”
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