Asia Pacific fund manager launches net zero fund, targets carbon offenders

Dr David Allen, a former JP Morgan Managing Director has launched a new net zero fund, which claims to be one of the first in the world to achieve a net zero carbon footprint without using costly carbon credits.

Allen, who’s now a Portfolio Manager at Sydney-based fund manager, Plato Investment Management, said the Fund, called the Plato Global Net Zero Hedge Fund, is an active extension long/short strategy that targets high carbon emitting listed companies via short positions, while taking long positions in companies with better than average carbon footprints. 

“We know an average sized SMSF invested in the ASX 200 requires 3135 trees to get to net zero, so I think this new Fund is a game-changer for those who want a simple solution to help them generate alpha while maintaining a net zero carbon footprint.

“Importantly the strategy is underpinned by Plato’s proprietary quantitative systems which have been delivering strong outcomes for more than 15 years for investors ranging from self-funded retirees to superannuation funds.

“For example, Plato’s Red Flags Model which incorporates more than 100 ESG red flags, including some 60 environmental inputs, plays a major role in portfolio construction. We check companies for a whole range of different signals using multiple data sources, which alone aren’t that powerful, but when they emerge together in numbers, we know we have a very valuable indicator.”

The Fund aims to outperform the MSCI World Index, while maintaining a net zero carbon exposure using the calculation methodology recommended by the Task Force on Climate-related Financial Disclosures.

Net zero fund provides exposure to “most important thematic”

Dr Don Hamson, co-founder of Plato Investment Management, and a veteran of Australia’s asset management industry, said the Fund has been launched to offer a ‘net zero now’ option for investment portfolios. 

“We believe the race to net zero emissions will be the most important investment thematic over the next 30 years, and we think this unique strategy provides a way for investors to achieve net zero now, while gaining exposure to the greatest economic transition we’ll likely see in our lifetimes.

“Climate change is an issue that our team and many of our clients feel strongly about and through the Plato Global Net Zero Fund we will be able to actively play a bigger part in driving corporate change while having the ability to starve polluters of capital by shorting the most egregious emitters.

Asia Markets understands Australian stocks including AGL (ASX:AGL) and Qantas (ASX: QAN), along with Singapore-listed, Singapore Airlines (SGX: C6L,) and Hong Kong-listed HK Electric (HKG: 2638) are amongst the current short positions in the new net zero fund.

The Plato Global Net Zero Fund is currently open to investors via an Australian Unit Trust.