One of the fastest-growing funds on the ASX at the forefront of investing in sustainable industries has put its weight behind deep tech investment fund and CSIRO spin-off Main Sequence.
Australian Ethical Investment Fund (ASX: AEF) has become a strategic investor in Main Sequence's second fund, with the partnership set to focus on investments aiming to solve issues in health, food, space and industrial productivity.
Main Sequence has invested in 27 companies since it was founded in 2017, including seven in a second fund launched in April this year.
Main Sequence partner Mike Zimmerman welcomed Australian Ethical’s investment, noting it reflects a shared commitment to tackling climate change as well as other global challenges.
“Australian Ethical is an ideal partner for us given our alignment in tackling global challenges and desire for a long-term relationship,” Zimmerman said.
"Australian Ethical is a leader in a broader trend emerging in both the institutional investor and corporate sector."
“Not only are we seeing a growing number of institutional investors focusing on sustainable and ethical investment opportunities, but we’re also seeing them bring these principles to the boardrooms of mainstream corporations they invest in, helping drive operational targets, reporting, and even executive remuneration tied to achievement of ESG (Environmental, Social, and Corporate Governance) goals.”
Australian Ethical’s investments include clean hydrogen power company Endua and animal-free dairy company Eden Brew (via Main Sequence).
Zimmerman referenced the recent Intergovernmental Panel on Climate Change (IPCC) report, highlighting the urgency of the situation we face and the diminishing window of opportunity to do something.
"As such, it also highlighted the urgent mandate for both ethical investing and innovative technologies and solutions — making Australian Ethical and Main Sequence a potent pairing," he said.
As of June 30, AEF had funds under management of $6.07 billion, representing a rise of 50 per cent year-over-year. Of that amount, $2.17 billion was in managed funds and $3.9 billion was in superannuation.
Australian Ethical has a market capitalisation of more than $1.18 billion, and since the start of 2020 its share price has surged from $4.81 to $10.54. The group reported a 19 per cent increase in NPAT to reach $11.3 million in FY21.
“For more than three decades, Australian Ethical has been using money as a force for good,” said Australian Ethical head of asset allocation John Woods.
“We’re thrilled to partner with Main Sequence to unleash the potential of some of tomorrow’s most innovative initiatives and help create a better future for people, planet, and animals.”
Main Sequence is an investor in v2food, which closed a $72 million funding round in August, as well as other companies such as Nourish Ingredients, Regrow and Clara Foods.
“This is a big challenge, and takes support from every part of the innovation system – industry, investors, research and government – to help Australia realise its potential and lead instead of just follow, on the world innovation stage,” said CSIRO CEO Dr Larry Marshall.
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