The University of New South Wales in Sydney, Australia and Oxford University Endowment Management (OUEM) in the United Kingdom are launching the Osmosis Developed Markets Resource Efficient Core Equity ex-Fossil Fuels fund.
Available to wholesale investors, Osmosis developed the product to address the risks and unintended bets bought into portfolios resulting from fossil fuel divestment. A statement from the group said the portfolio addresses both the supply side of fossil fuel energy generation through fossil fuel divestments and the demand side of fossil fuel energy consumption by reallocating active divestment risk to the most correlated resource efficient companies across the world. economy.
More investors, a statement said, are reviewing their portfolios’ fossil fuel exposure due to the link between carbon emissions and the frequency and severity of climate-related disasters.
The strategy will also protect investors from reflation in fossil fuel prices and the long-term risks of value destruction, they said.
CEO of Osmosis, Ben Dear, said: “Partnering with two leading global universities to launch this innovative ex-fossil fuels fund is an exciting development for the company and a testament to the effectiveness of the strategy.”
The universities have provided the fund with $50 million.
“The environmental challenges we face extend far beyond fossil fuel companies, and there is growing investor recognition that we need to reduce our dependence on natural resources across all sectors and geographies.
“Both the University of New South Wales and Oxford University Endowment Management share our belief that the efficient use of finite natural resources is critical to the future health and prosperity of our planet and that addressing these external risks at the portfolio level will not eliminate them can only reduce. environmental risks, but also, if risk allocation is managed using our resource efficiency factor, contribute to long-term economic returns.”
The fund was launched on September 26 in a UCITS ICAV and will be launched later this month in an onshore Australian trust that will act as a feeder fund for the UCITS ICAV. Once the Australian trust launches, the fund will have total assets under management (AUM) of just over $100 million.
Osmosis’ core equity portfolio has $12 billion in assets under management.