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February 07, 2003
Prince Albert of Monaco Helps Launch a New Sustainability Fund
by William Baue
Instead of investing directly in equities, this new "fund of funds" from Monaco invests in SRI and
sustainability funds.
SocialFunds.com --
In Monaco last week, Prince Albert announced the launch of a new socially responsible investing
(SRI) fund, the Monaco Environment Developpment Durable (MEDD). The fund was created by Sustainability Investments LLC
(SILLC) and Credit Foncier de
Monaco (CFM). In addition to providing the initial impetus for the fund, the Monaco government
provided seed money to ensure the successful launch of the fund.
 "Prince Albert was the driving force behind the creation
and the launch of this fund--it's really the reflection of his desire to contribute to the movement
toward global sustainability," said SILLC President Jerome de Bontin. "Being in a very
tourist-oriented part of the world and being between the sea and the mountains, Monaco is directly
exposed to risks such as global warming and its impact on sea level.'
SILLC was initially
mandated by the Monaco Government to write the investment philosophy, structure the product, and
find a local banking partner and as well as an asset manager. SILLC tapped Credit Agricole Asset Management, which is known as a
"green" bank in France, as asset manager, and chose its subsidiary, Credit Foncier de Monaco, the
largest bank in Monaco, as the local depository institution.
SILLC designed MEDD as a
fund of funds. Instead of investing directly in equities, MEDD invests in SRI or sustainability
funds that invest exclusively in equities. The global orientation prompted SILLC to allocate up to
70 percent of MEDD in large-capitalization companies. However, many companies practicing
sustainability have yet to reach large-cap status, so SILLC allocates up to 40 percent of the fund
in small-capitalization companies.
"Fields such as renewable energies or health food are
still emerging at a low level of capitalization, and so are not accessible through large-cap
investment," Mr. de Bontin told SocialFunds.com. "That's why we feel it's important for the fund
to invest in smaller companies via a proportion that's fairly aggressive."
As of January
31, MEDD invested its assets of more than €20 million in such SRI funds as the SAM
Sustainability Index Fund (23 percent), the Storebrand Global Fund (13 percent) and the Pictet
Global Water Fund (3 percent), though these percentages can change.
CFM handles retail
clientele in Monaco, while SILLC is distributing the product to retail clientele outside Monaco as
well as institutional investors in and outside Monaco. Institutional shares, which require a
minimum investment €300,000, are charged 80 basis points and an up-front sales fee of up to
one percent, with no fee when the fund is sold. A feeder fund for retail investors, which carries
a minimum investment of €1,000, charges 1.5 percent a year with up-front sales fees of up to 3
percent and no fees when the fund is sold.
While the goal of the MEDD fund is to provide a
solid financial return for investors, Prince Albert clearly is hoping the world will benefit from
the fund's promotion of sustainability. Monaco may be home of some of the world's most famous
casinos, but the Monaco government has revealed it does not want to gamble with the future health
of the global environment.
©
SRI World Group, Inc. All Rights Reserved.
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