Investment manager Nuveen has completed the initial public offering of an impact investing-focused closed-end fund and the Nuveen Core Plus Impact Fund began trading on the New York Stock Exchange this week.
The firm said it is the industry’s first responsible investing closed-end fund.
The IPO raised $575 million (€474 million) in its common share offering and if the underwriters exercise their option to purchase additional shares in full, the raise will increase to around $661 million.
The fund will focus on income and capital appreciation. It will invest in a diversified portfolio of fixed-income investments with four social and environmental themes: affordable housing; community and economic development; renewable energy and climate change; and natural resources. It will also invest in issuers that “demonstrate environmental, social and governance (ESG) leadership”, Nuveen said in a statement.
Nuveen has devised a proprietary Public Markets Impact Framework which the fund will use to identify opportunities to generate measurable positive social and environmental impact, it said.
Fund will mix ‘impact’ and ESG investing
A portion of the fund’s assets will be dedicated to impact investment opportunities with direct and measurable social or environmental benefits. The remainder will be dedicated to ESG investments. Nuveen will evaluate opportunities using its relative value framework which will enable it to deliver competitive financial returns.
Nuveen, the global investment manager of TIAA, has over $15 billion AUM and claims to be one of the largest investors in ESG and impact fixed income.
“Recent demand for opportunities aligned with investors’ values has been met with a surge of green, social and sustainable bonds, and increased awareness of the environmental and social benefits that can accompany competitive financial returns,” said Stephen Liberatore, lead portfolio manager for fixed income ESG and impact investments. “This has propelled the growth of the impact bond market.”