PGIM launches ESG-focused hard currency fund for EMD head – citywireselector.com

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Citywire Selector – For Professional Investors
Emerging Market Debt
Asset manager broadens Ucits-compliant range with new approach for experienced investment unit.
PGIM has launched its sixth emerging market debt-focused fund, with a new ESG-centric hard currency strategy for Cathy Hepworth’s team, Citywire Selector has learned.
The PGIM Emerging Market Hard Currency ESG Debt fund will be overseen by Citywire + rated Hepworth, who is head of emerging markets debt at PGIM Fixed Income, and senior portfolio manager Mariusz Banasiak.
The fund marks the first launch since the end of PGIM’s mandate deal with Nordea Investment Management, which was announced at the end of 2021.
This saw two emerging markets-focused funds, the Nordea 1 – Emerging Market Bond and Nordea 1 – Emerging Bond Opportunities, transferred to Thede Ruest’s team within Nordea.
Hepworth and her team had run the funds on an exclusive basis since 2012. However, the decision was taken to part ways when it was deemed Nordea had assembled relevant in-house capabilities and PGIM wanted to explore new avenues for growth. The deal officially ended on 6 January.
Speaking to Selector, Sarah McMullen, head of EMEA at PGIM Fixed Income, said: ‘We can take the strategies in our own direction while also expanding our overall footprint in the European market.’
In the new strategy, which is the eighth ESG Ucits fund from PGIM, the managers will construct a diversified portfolio, with securities drawn from hard currency opportunities across sovereign, quasi-sovereign and corporate bonds.
The fund meets Article 8 criteria under the EU’s Sustainable Financial Disclosure Regulation and comes hot on the heels of the launch in December of PGIM’s Strategic Income ESG fund for European investors, which also meets Article 8 criteria.
‘ESG is increasingly important with regards to the types of investment we can and will make,’ McMullen said.
‘The ESG agenda has become important across the board, not just within emerging markets, and it is encouraging we are able to offer a “dark green” fund, so to speak, to meet these needs.’
Hepworth and Banasiak will leverage PGIM Fixed Income’s fundamental research team, which comprises 110 analysts, as well as its five-strong ESG research team. McMullen said PGIM has not developed a local currency version of the ESG-centric emerging market debt fund but did not discount it happening in the future.
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