Arch launches sustainable fund for institutions

Arch Investment Group will launch its Arch Sustainable Finance Fund (ASFF) to institutional investors, with an initial capacity of around $150m.

The fund invests in companies profiting from major long-term environmental, infrastructural and socio-economic trends, targeting net returns of 15%-20% with a volatility of 5%-8% over the medium term.

It makes the same core investments as Arch’s Sustainable Opportunities Fund, launched early this year and already closed to new investors, having delivered more than 11% since inception. ASFF will invest in more asset backed lending situations, noted Stephen Decani, partner and group head of business development at Arch, shaving a little off the performance but reducing the volatility. ASFF also has a shorter-term focus than its sister fund.

It has a very flexible strategy, with the ability to go short and invest in both private and public companies, though Decani said it will initially concentrate on long positions in private companies, where there is most value to be extracted.

“Long-term socio-economic trends and infrastructural demands are influencing investment behaviour within developed and developing nations,” noted Decani.

Ultimately, ASFF is expected to grow to over $300m.

Arch, founded in 2002 by Robin Farrell, the former head of alternative investments at Dresdner Kleinwort Wassertein, has over S$450m in assets under management.