Goldman Sachs AM repositions former Global Energy Equity fund to focus on environmental transition

The Global Energy Equity fund, which was a legacy NN Investment Partners product, was managed with a quantitative approach and a narrow focus on the energy sector.

However, the newly launched Goldman Sachs Global Environmental Equity strategy uses the structure of the former legacy vehicle but has a new investment universe and is managed by GSAM’s fundamental equity team. 

The Article 8-classified fund focuses on companies with a heavy environmental footprint that are seeking to improve their business models and sustainability profiles.

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Using the firm’s proprietary internal tools and systems, the managers will qualitatively and quantitatively assess the environmental impact and transition plans of the companies they invest in. 

This will be coupled with ongoing stewardship and engagement that will seek to monitor progress and promote sustainable and shareholder-friendly practices.

The fund is focused on five key-themes: extraction, power generation, manufacturing, transportation, and consumption. It invests across a range of sectors, predominantly in high quality, mature, value-oriented companies, which exhibit strong free-cash-flow yields and potentially attractive valuations. 

According to GSAM, the strategy can “provide balance” to broader sustainable equity allocations, which can often be growth-oriented, and can be interesting to investors seeking to reduce the environmental impact of their investment portfolio.

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Alexis Deladerrière, head of international developed market equities at GSAM, said: “The companies that have a heavy environmental footprint today will play the biggest role in driving progress towards net zero and other environmental targets. 

“We believe there are significant opportunities for investors to benefit from exposure to companies with strong value characteristics that are improving their sustainability profiles.

“The strategy is designed to provide investors with access to attractive opportunities within a broad investable universe that we believe are consistent with a net zero by 2050 investment portfolio.”