Partner
Since the launch of its inaugural green bond fund in 2016, NN Investment Partners (NN IP) has seen the market transform, shifting its focus from conventional fixed income counterparts to meeting net zero goals and tackling climate change. This transformation is spurred by recently introduced regulations, such as the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy. Green bonds have become a mainstream product in the fixed income market as investors recognize their financial performance.
With the market growing and client demand increasing NN IP now manages EUR 5 billion Assets under Management (AuM) across its green bond strategies and mandates¹. NN IP expects an acceleration of investments in green bonds in light of sharpened ambitions of investors to address climate change.
Douglas Farquhar, Client Portfolio Manager Green Bonds, at NN Investment Partners comments: “Since mid-2021 the green bond market has grown exponentially as it has gained support of investors to allocate in solutions that can create a positive environmental impact. Short duration and corporate green bond funds remain popular due to the potential to obtain high yield, performance and a positive environmental impact. The rapid growth in our green bonds strategies underlines that green bonds are being recognized for the pivotal role they play in the energy transition, contributing to meeting net zero goals and addressing climate change.”
In the future we expect more market growth due to increasing issuances, based on two trends. First, the energy transition will result in an acceleration of issuances with sovereigns and corporates looking for alternatives to fossil fuels and exploring other low carbon transport opportunities. Second, some segments such as sterling investors lag behind which indicates there is still more room for growth. US dollar denominated issuances rose in the last quarter of 2021, enabling issuers in the United States – and on a more global scale – to allocate in green bonds. With more issuers entering the market is expected to continue growing. Based on these two trends, NN IP expects that growth in the GSS market will persist with a predicted EUR 1.1 trillion worth of issuances in 2022.
Bram Bos, Lead Portfolio Manager Green Bonds, at NN Investment Partners adds: “With the growing green bonds market and investor demand we expect the momentum to continue. Our dedicated green bonds team is one of the largest in the industry that conducts dedicated green bonds analysis to safeguard our dark green approach. To keep up with the market appetite and resources required for ongoing analysis and reliable impact reporting, I am pleased to share that Roel van Broekhuizen joined our team as of 1 March 2022 as Portfolio Manager. Roel joined NN IP in 2020 and rotated throughout different teams at the firm, including the green bonds team, a few months earlier he obtained his MSc in Business Administration from de Vrije Universiteit in Amsterdam. Roel will support in managing our green bond portfolios and assist in monitoring new market developments within the green, social and sustainability market.”
¹Date as of 31 March 2022
