Sustainability-focused asset manager Osmosis Investment Management announced the launch of the Osmosis Emerging Markets Core Equity Transition Fund, a new fund aimed at providing investors with exposure to emerging markets growth in addition to environmental progress, through investments in companies that use resources to efficiently reduce carbon, water and waste exposure.
Founded in 2009, Osmosis manages $16.6 billion in sustainable assets across systematic equity, fixed income and credit strategies, backed by institutional shareholders including the Oxford Endowment Fund, Capricorn Investment Group and Amova Asset Management. The firm positions itself as a cross-asset specialist centered on environmental data and transition-focused solutions.
The asset manager said the new fund comes to market amid a slowdown in global equity fund issuance and a sharp drop in new sustainable equity launches, and as emerging markets remain one of the most underdeveloped areas for sustainable investment, often limited by concerns around data availability and reliability. According to Osmosis, the new fund responds to growing investor demand for a sustainable core strategy that maintains low tracking error while achieving meaningful environmental progress.
Ben Dear, CEO and Founder of Osmosis, said:
“Emerging markets sit at the center of the climate challenge, yet investors are too often reliant on limited third party data and simplistic negative screens that lead to sub-optimal portfolios and, in some cases, entirely inaccurate environmental profiles.”
The strategy for the fund is built on the Osmosis’ Resource Efficiency process, and follows a three-year effort to collect and standardize publicly reported carbon, water and waste data across emerging markets, which included hiring a dedicated team of analysts to collect, extrapolate, clean, and standardize publicly reported carbon, water, and waste data across all major sectors.
According to Osmosis, the new fund will seek to deliver superior risk-adjusted returns versus the MSCI Emerging Markets benchmark by allocating to companies that are demonstrably more Resource Efficient than their sector peers, with the firm’s research indicating that such companies are typically better managed, more consistently profitable, and operate with lower leverage.
The fund will formally launch on 10 December with $80 million in seed capital from the IMAS Foundation.
Jamie Parkin, Head of Emerging Markets Research at Osmosis, said:
“Data is the decisive factor in quantitative emerging markets investing. Our mandate was to replicate our developed markets methodology while adapting to the complexity of these economies. I am delighted that this research effort now results in a fully investable strategy that challenges outdated assumptions about sustainability data in emerging markets.”
