ImpactLeveraging long-term experience in impact investing, generating lasting positive social and environmental change
Leveraging BlueOrchard‘s 20+ years of experience in impact investing
Schroders Capital’s impact across themes and asset classes
At Schroders Capital, we take pride in our ability to provide investors with innovative ways of tackling social and environmental challenges that achieve a lasting positive impact alongside seeking attractive market returns.
Schroders Capital’s capabilities stem from our history of ESG integration and sustainable investment strategies. BlueOrchard is entirely dedicated to impact investing and this expertise is further leveraged across Schroders Capital’s teams and asset classes.
Impact investment solutions spanning multiple themes and strategies across private assets
We back what we believe are innovative and well-run businesses that consider positive social and environmental impact essential to their mission. Our aim is to help these businesses grow and succeed. We actively support management teams, focusing on strategy, products, distribution, processes and operations. For example, through certain private equity investments, we aim to create quality jobs, as we believe there are significant value creation opportunities linked to investing in employees. Additionally, we have a tailored private equity strategy in frontier and emerging markets via BlueOrchard that focuses on underserved communities.
Infrastructure projects and companies are core to the growth and prosperity of economies, creating jobs and delivering essential services to the communities that they serve. Certain types of infrastructure can play a key role in building a greener future and helping to combat climate change by supporting more efficient or environmentally-friendly ways of producing energy. A dedicated sustainable infrastructure investment strategy for emerging and frontier markets is developed under the lead of Blue Orchard.
Our impact investment approach to real estate is predicated upon three pillars: People, Planet, and Place. These pillars are aligned with each of their respective UN Sustainable Development Goals. Each recognises the contribution of the built environment and our responsibilities as real estate investors to society, the environment and economies. Our impact approach includes our net zero carbon pathway.
Securitised Products & Private Debt
Private debt investments are the foundation and core of our impact and sustainable investing activities, generating substantial social impact through the creation of jobs and reduction of inequality. We provide debt financing to financial institutions for which positive social and environmental impact is key. BlueOrchard manages the world’s first and today largest commercial microfinance fund.
Insurance-linked investments (ILI) reinsure natural catastrophe, mortality and pandemic risk. These are extreme events that cause severe disruption to individuals and the communities in which they live. By broadening the pool of potential risk sharers to make the transfer of risk more efficient, ILI contributes to a range of vital socio-economic benefits. For example, by helping to reduce the cost of insurance we improve accessibility to protection and affordability while maintaining high quality standards in insurance services. Our objective is to promote social and environmental features of ILIs to improve the resilience of people and the planet to the increasing number of climate-related events.
Supporting the 2030 Agenda for Sustainable Development
Through our investments across asset classes and themes, we have the ability to support the achievement of a range of the UN Sustainable Development Goals and their sub-targets in areas such as good health and well-being; affordable and clean energy; decent work and economic growth; industry, innovation and infrastructure; sustainable cities and communities; responsible consumption and production; reducetion of inequalities; and climate action, amongst others.
For more information on Schroders Capital’s approach to sustainability, please see below
With strong local footprints across the globe, our investors trust us to source what we consider the most sought-after investment opportunities.
Key Investment Risks
Volatility risk: The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested.
Liquidity risk: There may be very limited liquidity available via the secondary market of the proposed Fund given the underlying private credit assets and investors should consider an investment only if they intend to hold it for the life of the proposed Fund. Liquidity of the underlying investments might not be sufficient to meet investor subscription and redemption requirements.
Interest rate risk: A rise in interest rates generally causes bond prices to fall.
Credit risk of underlying issuers/lenders: A decline in the financial health of an issuer/lender can cause the value of its bonds/ loans to fall or become worthless.
Currency risk: The fund can be exposed to different currencies. Changes in foreign exchange rates could create losses.
Counterparty risk: The counterparty to a derivative or other contractual agreement or synthetic financial product could become unable to honour its commitments to the proposed fund, potentially creating a partial or total loss for the proposed fund.
Derivatives risk: A derivative may not perform as expected, and may create losses greater than the cost of the derivative.
Concentration risk: The proposed Fund may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the fund, both up or down, which may adversely impact the performance of the fund.
Gearing risk: The proposed fund may borrow money to invest in further investments. Gearing will increase returns if the value of the investments purchased increase in value by more than the cost of borrowing, or reduce returns if they fail to do so.
Valuation risk: The underlying private credit assets may be subject to inadequate pricing reliability. In addition, property-based vehicles invest in real property, the value of which is generally a matter of a valuer’s opinion.
Industry/country risk: Legislative changes, changes in general economic conditions and increased competitive forces may affect the value of investments. Additional risks may include greater social and political uncertainty and instability and natural disasters.
Infrastructure asset risk: Infrastructure assets expose investors to additional risks, in particular construction risk (e.g. construction delays, cost overruns, etc.) and deployment risk (e.g. capital being deployed in several instalments during construction period rather than upfront for brownfield investments).