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Friday 07 May, 2021

Liontrust ESG Trust

Intention to Float

RNS Number : 8486X
Liontrust ESG Trust PLC
07 May 2021
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF

SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL. PLEASE SEE THE SECTION ENTITLED "DISCLAIMERS" AT THE END OF THIS ANNOUNCEMENT.

 

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the prospectus to be published by Liontrust ESG Trust PLC (the "Prospectus") and not in reliance on this announcement. When published, a copy of the Prospectus will, subject to certain access restrictions, be available for inspection on the Company's website: www.liontrust.co.uk/esgt-launch and at the registered office of the Company. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase, investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.

 

7 May 2021

 

 

Liontrust ESG Trust PLC

 

Intention to Float

 

Liontrust ESG Trust PLC (the "Company" or "ESGT") is pleased to announce its intention to undertake an initial public offering and to seek admission of its ordinary shares (the "Ordinary Shares") to the premium segment of the Official List of the Financial Conduct Authority and the premium segment of the main market of the London Stock Exchange (the "InitialAdmission"). The Company is seeking to raise £150 million by means of a placing, offer for subscription and intermediaries offer (the "Initial Issue"). Following the Initial Issue, a placing programme will allow the Company to issue up to a further 250 million Ordinary Shares and/or C shares during the period commencing on Initial Admission and ending on the first anniversary of the date of publication of the Prospectus (the "Placing Programme").

 

The Company will invest in a diversified portfolio of sustainable companies. Sustainable companies are those that Liontrust believes will capitalise on and help drive the key structural growth trends that will shape the sustainable global economy of the future; will provide or produce sustainable products and services; and have a progressive approach to the management of environmental, social and governance issues ("Sustainable Companies").

 

The launch comes at a time of rising interest in sustainability and demand for sustainable investments. The Company will normally be invested in a concentrated portfolio of between 25 and 35 holdings in Sustainable Companies around the world with the highest sustainability scores, as determined by the Liontrust sustainable investment team's (the "Sustainable Investment Team") established investment process. The permanency of capital of an investment trust will enable the Sustainable Investment Team to be unconstrained by market capitalisation when selecting investments.  This will allow the Sustainable Investment Team to construct a high-conviction portfolio with less consideration of shorter-term volatility than when managing open-ended funds and it is expected that ESGT will have an exposure to small cap stocks that are not held by the open-ended funds they manage.

 

The Company will appoint Liontrust Fund Partners LLP as its Alternative Investment Fund Manager ("AIFM"), who in turn will delegate investment management to Liontrust Investment Partners LLP (the "Investment Manager"). The portfolio of ESGT will be managed by Peter Michaelis, Simon Clements and Chris Foster, who are part of the 13-strong Sustainable Investment team with a 20-year track record of managing sustainable funds. Peter and Simon have managed sustainable global growth strategies since 2001 and 2010, respectively, with Chris becoming a co-manager in 2020, having joined the Sustainable Investment Team in 2015.

 

It is expected that the Prospectus will be published in late May and that the Initial Issue will close in late June. The Prospectus will be made available on the Company's website at www.liontrust.co.uk/esgt-launch.

 

Why sustainable investment?

· Creating a cleaner, safer and healthier future: Investing sustainably can help to tackle global crises such as climate change, pollution, habitat destruction, collapsing biodiversity and social inequality.

· Performance: The last two decades have demonstrated that integrating sustainability into stock selection can enhance investor returns.1

· Greater awareness: An increasing proportion of investors care about how they make their money as well as how much money they make. 75 per cent. of consumers consider sustainability to be an important part of their everyday life.2 Of those who do not invest sustainably, 80 per cent. were aware of sustainable investment, showing the potential for growth.

· Increasing investment: Research conducted for Liontrust in December 2020 reveals that 78 per cent. of wealth managers and 71 per cent. of financial advisers have seen an increasing proportion of their clients investing sustainably over the past year.3

· Growth in assets and funds: According to the Forum for Sustainable and Responsible Investment's 2020 trends report, sustainable investment now represents 33 per cent. of the $51.4 trillion in total US assets under management, and the figure in Europe doubled over 2020 to hit €1.1 trillion.

 

Investment Manager

· Long-track record: Peter Michaelis (Citywire AA rated) and Simon Clements (Citywire AAA rated) have been managing sustainable global growth strategies since 2001 and 2010 respectively and Chris Foster became a co-manager of these strategies in 2020.

· Pioneers: Key members of the Sustainable Investment Team were among the pioneers of sustainable investing, being founder members of the PRI (Principles for Responsible Investment) while at Aviva and leading on issues that are now central to mainstream investing such as not owning companies exposed to diesel engines, coal and oil (in 2001) and moving to exclude natural gas (from 2016).

 

Investment Process

· Distinct, rigorous and repeatable process: The process seeks to generate strong returns from investing in companies aiming to deliver profits through positive social and environmental impacts. The Sustainable Investment Team looks at the world through the prism of three mega trends - Better resource efficiency (cleaner), Improved health (healthier) and Greater safety and resilience (safer) - and then 21 themes within these.

· Time arbitrage: By having a longer time horizon than most, the Sustainable Investment Team can patiently invest in businesses they believe have years of growth ahead and take advantage of dislocations in the market when these businesses are trading considerably below what the managers believe they are worth.

· Engagement: This is an integral part of how the Sustainable Investment Team invests. Engaging on key environmental, social and governance ("ESG") issues gives the managers greater insight, helps to identify leading companies and is used as a lever to encourage better business practices.

 

Performance and Impact

· Strong performance: The Liontrust SF Global Growth Fund (which has the same investment process and a similar objective and mandate to ESGT) has outperformed the MSCI World Index over one, three, five and 10 years.1 The MSCI World Index is the Fund's comparator benchmark.

· Investor perception: Liontrust is regarded as the best investment manager for sustainable investment among wealth managers and advisers (34 per cent.) and private investors (25 per cent.).4

· Impact: Since 2015, the Sustainable Investment Team has shown how its funds' themes and investments are contributing to the UN's Sustainable Development Goals ("SDGs"). The Sustainable Investment Team has for many years published all holdings and the rationale for them.

· Mitigating CO 2 exposure: Compared to the MSCI World Index, companies held in the Liontrust SF Global Growth Fund emit 88.3 per cent. less carbon dioxide while 28.8 per cent. of the portfolio is invested in stocks involved in technology that directly cut carbon emissions (at 31 December 2020).

 

SDGs that are hard to invest in

In the interests of diversifying and to impact a wide range of environmental and societal issues, the Company's investments will be spread across the Sustainable Investment Team's range of 21 ESG themes which have been linked to the SDGs. However, there are some SDGs which are hard to impact through investment (SDG 1- No poverty, SDG 2 - Zero hunger, SDG 14 - Life below water and SDG 15 - Life on land) ("Uninvestable SDGs"). In these areas, there are currently very few opportunities to invest successfully while having a positive impact on these SDGs.

 

Management Fees and SDGs research

The AIFM is entitled to receive a fee of 0.65 per cent. per annum of the net assets of the Company. The AIFM is responsible for the payment of the Investment Manager's fees. The Investment Manager will donate up to 10 per cent. of the management fees to fund  research identifying and developing financial instruments covering the currently Uninvestable SDGs. When these instruments are developed, they will become available for the Company and other investors. The percentage of the fees allocated to research will be at the discretion of the Investment Manager. No performance fee is payable by the Company to the AIFM.

 

Winterflood Securities Limited is acting as sponsor, financial adviser and placing agent to the Initial Issue.

 

Richard Laing, Chairman of ESGT, said: "Whether it is David Attenborough's TV documentaries, the impact of climate change, plastic and other pollution in the sea, overfishing or the destruction of biodiversity, it is impossible not to be aware of the urgency of the action we need to take to tackle these crises. There is also an increasing recognition of the key role that investment can play in all aspects of environmental, social and governance issues, and that sustainable investing can enhance investor returns compared to mainstream funds and indices.

 

ESGT will offer an Investment Manager with more than 20 years of experience of investing sustainably, with a track record demonstrating the positive impact of their process and with a vision of the development of a sustainable world, economy and society over the next two decades."

 

Peter Michaelis, Portfolio Manager, said: "We are excited by the opportunities that ESGT offers in being able to construct a high conviction portfolio with companies from across the market cap spectrum and our sustainable investment themes. 

 

"Key attractions include the wide opportunity set it provides as it is unconstrained by market capitalisation, a concentrated portfolio focused on the highest sustainability companies and the chance to invest a portion of the portfolio in small cap companies that we do not hold in our open-ended funds. These stocks fit perfectly with our focus on the long-term drivers of the sustainable economy of the future.

 

"Looking to the long-term benefit for investors, up to 10 per cent. of the management fee we receive from ESGT will be used to fund research to identify and develop financial instruments covering those UN Sustainable Development Goals that are currently uninvestable.

 

"When these financial instruments are developed, they will become available to ESGT and other investors."

 

John Ions, Chief Executive of Liontrust, added: "This is a significant launch for Liontrust in expanding our offering into investment trusts.

 

"The launch of ESGT recognises the growing demand for sustainable investment as an increasing number of people want their investments to make positive contributions to society, the environment and the economy.

 

"Over the past two decades, the Sustainable Investment team has demonstrated the ability of its investment process to outperform mainstream funds and the impact of its funds on sustainable development."1

 

 

For further information please contact:

 

Liontrust

020 7412 1700

David Boyle: Head of Corporate Development

Simon Hildrey: Chief Marketing Officer

Louis Stevens: Head of Sales, Sustainable Funds

 

 

Winterflood Securities Limited

020 3100 0000

Darren Willis

Neil Morgan

Chris Mills

 

 

For press inquiries:

Share Communications

 

 

 

Eleanor Mitchell   

Hugo Mortimer-Harvey  

Zoe Powell

 

07947 823957

07769 722663

07866 639014

 

1 Past performance is not a guide to future performance, investments can result in total loss of capital.

2 Source: Research in Finance, 500 consumers

3 Source: Research in Finance, 49 wealth managers and 96 financial advisers

4 Source: Research in Finance, December 2020

 

Further information on the Company

 

Investment Objective

The Company's investment objective is to deliver to Shareholders a total return over the long term (five years or more) by investing globally in Sustainable Companies.

Investment Policy

The Company will seek to achieve its investment objective through exposure to a diversified portfolio of sustainable companies. Sustainable Companies are those that the Investment Manager believes will capitalise on and help drive the key structural growth trends that will shape the sustainable global economy of the future; will provide or produce sustainable products and services; and have a progressive approach to the management of environmental, social and governance issues. The Company's Investments are assessed using the Investment Manager's sustainability assessment process and given an ESG rating, with the exception of cash or cash-like holdings. 

The portfolio will comprise predominantly quoted equity securities. The Company will be free to invest in Sustainable Companies in any particular market, sector or country and will not be subject to market capitalisation limits. Despite the absence of specific market, sector, country or market capitalisation limits, the Company will invest and manage its Investments in a manner that is consistent with spreading investment risk and expects to invest predominantly in developed market securities.

The Company's approach is to be a long term (five years or more) investor in its chosen investments provided they continue to meet the Investment Manager 's investment and sustainability criteria. 

It is anticipated that in normal circumstances the Company's portfolio of Investments will, once the net proceeds of the Initial Issue have been invested, comprise between 25 and 35 holdings.

Investment restrictions

The Company will comply with the following investment restrictions:

-  no more than 10 per cent. of the Company's net assets ("Net Assets") will be exposed to any one company;

-  no more than 20 per cent. of Net Assets will be exposed to companies listed on exchanges in Emerging Market countries;

-  no more than 10 per cent. of Net Assets will be invested in aggregate in unlisted securities, convertible securities and/or preference shares; and

-  the Company will not hold securities which represent more than 20 per cent. of the voting rights of any company.

Emerging Market countries mean each constituent country represented in the MSCI Emerging Markets Index from time to time.

Each of the above restrictions will be calculated at the time of investment.

Hedging and derivatives

The Company may use derivative instruments to create leverage via synthetic long positions (i.e. positions which are in economic terms equivalent to long positions), for example, by using futures, options and CFDs. This strategy may be used to gain exposure to equities and equity-related securities and to seek both to protect and to enhance the returns achieved. Each synthetic long position will be treated as if a direct equity investment had been made and will be subject to the same diversification and risk spreading limits as set out in the investment restrictions above. The use of derivatives to create leverage will also be subject to the leverage and borrowing limits set out below.

The Company may also use derivatives for efficient portfolio management purposes including hedging. In particular, investments will be made in assets denominated in a number of currencies. The Investment Manager may, at its discretion, choose to hedge all or a proportion of the non-Sterling denominated assets of the Company into Sterling, the base currency of the Company, in order to mitigate the impact of currency fluctuations on the value of non-Sterling denominated assets.

Leverage and borrowing limits

The board of the Company (the "Board") will adopt a policy that the Gross Asset Exposure of the Company, whether from borrowing or derivatives (where such derivatives are used for investment purposes), will not exceed the Net Assets of the Company by more than 30 per cent. Gross Asset Exposure for these purposes is the value of the total portfolio to which the Company is exposed, whether through direct or indirect investment (including through derivatives), after the deduction of cash balances but without taking into account any hedging and netting arrangements.

The Company may, from time to time, use borrowings for investment purposes and for working capital.  Borrowings are not normally expected to exceed 10 per cent. of Net Assets but will not, in any event, exceed 20 per cent. of Net Assets.

The above limits will be calculated at the point of drawdown of any borrowing and the entering into of any contracts in respect of derivatives.

Cash and currency management

In certain circumstances, the Company may hold and/or invest in, significant amounts of cash and cash equivalents (such as certificates of deposit), debt securities including government and corporate bonds and money market instruments (including treasury bills, certificates of deposit, bankers acceptances and commercial paper) in line with prudent cash management guidelines agreed between the Board, the AIFM and Investment Manager. There is no limit on the maximum exposure to cash and cash equivalents; however, no more than 20 per cent. of Net Assets may be deposited with any one credit institution. Any investment in bonds will be in corporate and government fixed or floating rate instruments. The Company may pledge or charge its holding in cash or debt securities as collateral for financial derivative instruments.

Reference Index

 

The Company will use the MSCI World Index as its reference index (the "Reference Index") for performance comparison purposes only and will not use the Reference Index to define or restrict the composition of the Company's portfolio of investments which may comprise (in whole or in part) investments which are not constituents of the Reference Index.

 

As the Reference Index will be used for performance comparison purposes only, the Company's investments will not mirror the stocks and weightings that constitute any particular index or indices (to include the Reference Index).

 

Dividend Policy

 

It is anticipated that the majority of Shareholder returns will be generated through capital appreciation rather than income distribution. Accordingly, the Company does not have any dividend targets but will pay out its income as required by applicable law.  The Company intends to pay dividends on an annual basis.

 

Premium and discount management

 

The Board will have the discretion to seek to manage, on an ongoing basis, the premium or discount to their net asset value ("NAV") at which the Ordinary Shares may trade through further issues and buy backs of Ordinary Shares, as appropriate. 

 

Life of the Company

 

The directors of the Company (the "Directors") will propose an ordinary resolution that the Company continues its business as an investment trust (a "Continuation Resolution") at the first annual general meeting of the Company following the fifth anniversary of Initial Admission.  If the Continuation Resolution is passed, the Directors will put a further Continuation Resolution to the Company's shareholders at the annual general meeting of the Company every five years thereafter.

 

If a Continuation Resolution is not passed, the Directors will be required to put forward proposals for the reconstruction, reorganisation or winding-up of the Company within six months following the date on which the relevant Continuation Resolution is not passed.

 

The Board

 

The Company will have an experienced Board comprising senior professionals from the sustainable investment, investment trust and asset management sectors. All of the Directors will be non-executive and will be independent of the AIFM, the Investment Manager and the other service providers.

 

It is intended that the Directors will be as follows:

 

Richard Laing, Chair

Richard holds a number of non-executive appointments and currently chairs 3i Infrastructure plc. He is also on the Board of Tritax Big Box REIT plc, Leeds Castle Foundation and JP Morgan Emerging Markets Investment Trust plc. Previously, Richard was a trustee of Plan International UK, the international children's charity and The Overseas Development Institute. Richard was Chief Executive of CDC Group plc, from 2004- 2011, having joined the organisation in 2000 as Finance Director. Prior to CDC, he spent 15 years at De La Rue, where he held a number of positions, in the UK and internationally, latterly as the Group Finance Director. Richard was formerly a non-executive director of Perpetual Income and Growth Investment Trust plc, the London Metal Exchange, Aureos Capital, Madagascar Oil Limited and Emerging Markets Private Equity Association, where he was chairman of the Advisory Council. Richard also worked in agribusiness and at PricewaterhouseCoopers and Marks & Spencer. He is a Fellow of the Institute of Chartered Accountants in England and Wales (FCA).

Clare Brook, Non-Executive Director

Clare is CEO of the Blue Marine Foundation, an ocean conservation NGO.  Prior to that, she worked for 24 years in sustainable investment.  At Jupiter, she managed the pioneering Ecology fund and the UK's first 'green' investment trust in the early '90s.  She then managed the Global Care range of funds at NPI and Henderson from 1994 to 1999.  In 2000, she established the Sustainable Investment division of Aviva where she and her team launched the Sustainable Future range of funds, now managed by Liontrust.  In 2008, Clare co-founded WHEB Asset Management, a positive impact investment firm.  Clare is particularly interested in the intersect between environmental NGOs and finance and investment in the tackling of environmental challenges.

Sarah Ing , Chair of the Audit Committee

Sarah Ing is a Chartered Accountant with 30 years' experience in financial services including audit, corporate finance, investment banking and asset management. During her executive career, she was a top-rated equity research analyst covering the UK general financial services sector and also founded and ran an equity hedge fund investment management business. Sarah is currently a Non-Executive Director at CMC Markets plc and at XPS Pensions Group plc, where she is Chair of the Sustainability/ESG committee.

Kunle Olafare, Non-Executive Director

Kunle has worked in financial services for over 25 years and, since 2016, he has been the Chief Executive and Client Director of SK Financial, a London based independent financial planning firm. Prior to Joining SK Financial in 2009, he spent nine years as Head of Advice, Financial Planning at Kleinwort Benson and prior to this held various investor and client facing roles as an IFA. Complementing his financial experience, Kunle also has an active involvement in many community roles: he is a board member of the Haberdashers' Livery Company, Surrey County Cricket Club and the Lord Mayor's Appeal. In his spare time, Kunle has set up financial education programmes for young Premier League footballers, pupils and undergraduates with an ambition for personal finance and law to be on the national school curriculum, taught by current finance and legal professionals.

 

Liontrust

Liontrust Asset Management PLC, the holding company of the Liontrust group, is a specialist fund management company established in 1995 and listed on the London Stock Exchange in 1999 and is a member of the FTSE 250. Headquartered on the Strand in London with additional offices in Edinburgh and Luxemburg, the Liontrust group has £32.5 billion in assets under management and advice ("AuMA"), as at 16 April 2021, of which £10.2 billion is managed by the Sustainable Investment Team.

The Sustainable Investment Team has demonstrated for over 20 years that its investment process can deliver superior returns over conventional funds and the Sustainable Investment Team has a track record of investing in companies to help create a cleaner, healthier and safer world while delivering returns to investors that outperform mainstream funds and indices. All eight of the UK domiciled equity funds managed by the Sustainable Investment Team are in the first quartile of their respective Investment Association sectors over one, three and five years to 31 March 2020. Liontrust has also won numerous accolades and awards for the performance of its Sustainable Investment Team including: Investment Week Fund Manager of the Year Awards in 2020 for the Liontrust SF Cautious Managed and Liontrust SF Managed funds; Best ESG Fund (Liontrust SF Global Growth Fund) at the Portfolio Adviser Fund Awards 2020; Best Active Ethical/Sustainable Fund (Liontrust SF Global Growth Fund) at the AJ Bell Fund and Investment Trust Awards 2019; and Mixed Asset Fund of the Year (Liontrust SF Managed Growth Fund) at the FT Adviser 100 Club Awards 2020.5

Liontrust's purpose is to have a positive impact on its clients, stakeholders and society. The Investment Manager aims to do this by providing the environment which enables the fund managers and staff to flourish, helping its clients achieve their financial goals, supporting companies in generating sustainable growth and empowering and inspiring the wider community.

The Sustainable Investment Team is headed by Peter Michaelis and has been managing sustainable funds for 20 years. The Sustainable Investment Team has consistently led on sustainability issues, for instance not owning companies exposed to diesel engines, coal and oil (in 2001) and moving to exclude natural gas (from 2016). The award-winning Team were among the pioneers of sustainable investing when they launched their Sustainable Future fund range in 2001, engaging on issues that are now central to mainstream investing and with key members of the Team becoming founding members of the PRI.

 

The three lead managers of ESGT will be:

Peter Michaelis

Peter Michaelis joined Liontrust in April 2017 as part of the acquisition of Alliance Trust Investments, where he was Head of Investment.  Peter has been managing money in Sustainable and Responsible Investment for over 20 years.  After completing a PhD in Environmental Economics, Peter started his career working for the Steel Construction Institute as an Environmental Engineer.  He then moved to Henderson Global Investors where he was able to use his experience as a Sustainable and Responsible Investment Analyst and Assistant portfolio manager. In 2001, he moved to Aviva Investors (previously Morley Fund Management), where he was promoted to lead portfolio manager on a number of its Sustainable and Responsible Investment funds, before being made Head of Sustainable and Responsible Investment.

Simon Clements

Simon Clements also transferred to Liontrust in 2017 having spent five years at Alliance Trust Investments.  Prior to this, he spent 12 years at Aviva Investors (previously Morley Fund Management) where, most recently, he was head of global equities.  Earlier in his career, he worked as a portfolio accountant and risk and performance analyst before joining Aviva Investors in 2000 to help develop its global equity and socially responsible investment propositions.  He is currently the lead manager of the SF Global Growth fund and the SF Absolute Growth fund, and co-manager on the SF Managed, SF Cautious Managed and SF Defensive Managed funds.  He holds a BA in economics from the University of Newcastle, Australia and a graduate diploma in applied finance and investment from the Securities Institute of Australia.

Chris Foster

Chris Foster also moved to Liontrust in April 2017 with the acquisition of Alliance Trust Investments. Chris joined Alliance Trust Investments through their management training programme after graduating with a First Class Honours degree in Economics and Mathematics from the University of Edinburgh. During his two-year graduate scheme, Chris completed rotations in Alliance Trust Savings, Fund Sales, and Equity Investments. Chris is a CFA Charterholder.

 

The Sustainable Investment Team consults an advisory committee of five experts in sustainability  who assess and challenge the Team and offer guidance on evolving issues. The committee members are:

 

Sophia Tickell

Sophia Tickell is Co-founder and Director of Meteos, a non-profit company, which runs senior dialogues, focused on finance, health and the environment.  She is the author of 'Banking on Trust', 'Vital Connections: Science, Society and Sustaining Health', the EnergyFutures report, and the PharmaFutures series. Sophia was previously Chair of the Board at SustainAbility Ltd and led Oxfam's policy work on the private sector. Sophia is also Non-Executive Director of Liontrust Asset Management PLC.

Tony Greenham

Tony Greenham is Director of Economy, Enterprise and Manufacturing at the RSA (Royal Society of Arts, Manufactures and Commerce), where he leads a programme of policy research into the future of work, social impacts of technology, green industrial strategy and economic democracy.  He is a former corporate stockbroker and has written extensively on financial sector reform including the undergraduate economics textbook 'Where Does Money Come from?'.

Jonathon Porritt

Jonathon Porritt is Founder Director of Forum for the Future, the UK's leading sustainable development charity. His book, 'The World We Made', seeks to inspire people about the prospects of a sustainable world in 2050.  He is also Chancellor of Keele University and President of The Conservation Volunteers and former Chair of the UK Sustainable Development Commission.

Tim Jackson

Tim Jackson is Professor of Sustainable Development at the University of Surrey and Director of the Centre for the Understanding of Sustainable Prosperity (CUSP).  From 2004 to 2011, he was Economics Commissioner on the UK Sustainable Development Commission, where his work culminated in the publication of the controversial bestseller 'Prosperity without Growth' - economics for a finite planet.

Valborg Lie

Valborg Lie is Stewardship Manager at LGPS Central, responsible for bespoke engagement and voting services to support investment objectives.  She has a wealth of experience, working on responsible investment (RI) issues over the last 15 years.  From 2005 to 2013, she worked as Head of RI within the Norwegian Ministry of Finance, overseeing the management of the Norwegian Government Pension Fund Global (GPFG), one of the biggest sovereign wealth funds globally. Valborg leverages an exclusive network of institutional investors and sovereign wealth funds globally to help promote and build RI best practices.

 

Sustainability Reporting and Other Initiatives

 

The Liontrust group believes communication with its clients and stakeholders is very important and in that respect:

 

• Liontrust Asset Management PLC produces an annual review providing information in respect of how it is performing in terms of ESG matters;

• the Sustainable Investment Team produces an annual review which seeks to measure the impact of its investments and analyses the success of its engagement initiatives;

• the Sustainable Investment Team produces an annual review in which it reflects on the impact of its engagement activities and outlines its priorities; and

• the Company intends to produce a monthly factsheet.

 

A key initiative over the past year has been the One and a Half Degree Transition Challenge which is calling for all companies held within the Sustainable Future funds to explain how they plan to decarbonise their businesses to limit global warming to 1.5 degrees. The report on the findings of this climate crisis engagement will be published in time for the UN Climate Change Conference of Parties (COP 26) in early November. 

Other priority initiatives over the past year have been:

· to quantify the main impacts (good and bad) of the companies in which the team invests. The team is engaging with companies to disclose their main impacts.

· looking for companies that provide solutions to plastic pollution as potential investments as well as encouraging companies to reduce the amount of single use plastics they introduce to the environment. 

· engaging with companies to encourage greater diversity, looking at gender balance at a Board level and among senior positions, and looking at efforts to reduce any gender pay gaps.

· engaging companies to offer decent work and pay living wages and to ensure they mitigate risks, protect workers' rights and maximise the opportunities to support employees. They also encourage companies to use their influence to drive forward best practice further down their supply chains.

· engaging with financial services companies to encourage responsible investment policies, lending practices and increased adoption of sustainable investing.

 

Liontrust employees are involved in industry-wide initiatives and working groups including:

· PRI SDG and Active Ownership Committee

· PRI Investor Working Group on the Just Transition

· 30% Club Investor Group

· Access to Nutrition Index

· Diversity Project

 

Liontrust is affiliated with the following:

· Liontrust is a signatory to the PRI and the team was a founding signatory in 2006.

· Financial Reporting Council Stewardship Code

· Taskforce on Climate-Related Financial Disclosure

· 30% Club Investor Group

· Workforce Disclosure Initiative

· CDP (formally known as Carbon Disclosure Project)

· UK Sustainable Investment and Finance Association

 

Liontrust has endorsed the following statements:

· PRI Statement of Investor Commitment to Support a 'Just Transition' on Climate Change

· PRI Sustainable Palm Oil Expectation statement

· Global Investor Statement to Governments on Climate Change

· PRI Investor statement on deforestation and forest fires in the Amazon

· Access to Medicine - Global Investor Statement in support of an effective, fair and equitable global response to Covid -19

 

Key Risks Specific to the Company and the Securities

 

• The Company has no operating history and prospective investors have no historical financial statements or other meaningful operating or financial data from which prospective investors may base an evaluation of the likely performance of the Company.  

• There can be no guarantee that the Company will achieve its investment objective or that investors will get back the amount of their original investment.

• The Company has no employees and is reliant on the performance of third party service providers.  Failure by the AIFM, the Investment Manager or any other third party service provider to carry out its obligations to the Company in accordance with the terms of its appointment could have a materially detrimental impact on the operation of the Company.

• The Company depends on the diligence, skill and judgement of the Investment Manager's investment professionals and the information they generate and communicate to the Company during the normal course of their activities. 

• The Company's focus on ESG related companies, issuers and securities as well as its screening processes mean that the universe of investable securities is more limited than would otherwise be the case. The Company may also be exposed to investment risks caused by environmental events, including climate events which are exacerbated by climate change, such as hurricanes, drought, wildfires, earthquakes or floods. It might also be exposed to investments located in areas that are more susceptible to such climate change risks or vulnerable to those climate related events.

• Any change in the Company's tax status or in taxation legislation or practice may adversely affect the Company or the tax treatment for Shareholders investing in the Company.

• The value of an investment in the Company, and the returns derived from it, may go down as well as up and an investor may not get back the amount invested.  The market price of the Shares, like shares in all investment companies, may fluctuate independently of their underlying NAV and may trade at a discount or premium at different times, depending on factors such as supply and demand for the Shares, market conditions and general investor sentiment.

• There can be no guarantee that a liquid market in the Shares will develop or that the Shares will trade at prices close to their underlying NAV. Accordingly, Shareholders may be unable to realise all or part of their investment at such NAV or at all.

• The Company may issue new equity in the future pursuant to the Placing Programme or otherwise. Any further issues of Shares may dilute the voting rights and economic interests of existing Shareholders in the Company that do not participate pro-rata in the future issue of Shares.

 

5 Past performance is not a guide to future performance, investments can result in total loss of capital.

 

Important Notices

 

This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Liontrust Fund Partners LLP solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).

 

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any Ordinary Shares only on the basis of information contained in the Prospectus to be published by the Company in due course (and in any supplementary prospectus) and not in reliance on this announcement. Copies of the Prospectus, once published, may, subject to any applicable law, be obtained from the registered office of the Company and will be made available following publication for viewing at the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless

previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities

in the Company.

 

This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description or a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase Ordinary Shares.

 

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The material contained in this announcement is given as at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, any proposals referred to herein are subject to revision and amendment.

 

Winterflood Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as sponsor, financial adviser and placing agent for the Company and for no-one else in connection with the matters described in this announcement and will not regard any other person (whether or not a recipient of the Prospectus) as its client and will not be responsible to anyone for providing the protections afforded to its clients or for providing any advice in relation to the matters contained in this announcement.

 

The Ordinary Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and the Ordinary Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, within the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the U.S. Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States. Moreover, the Ordinary Shares have not been, nor will they be, registered under the applicable securities laws of Australia, Canada, the Republic of South Africa or Japan. Further, the Company is not, and will not be, registered under the US Investment Company Act of 1940, as amended. The Ordinary Shares of the Company will be offered and sold outside of the United States to non-U.S. Persons in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by Regulation S thereunder. Subject to certain exceptions, the Ordinary Shares may not be offered or sold in the United States, Australia, Canada, the Republic of South Africa, Japan or to, or for the account or benefit of, any national, resident or citizen of, the United States, Australia, Canada, the Republic of South Africa, Japan. The Initial Issue and the distribution of this announcement, in certain jurisdictions may be restricted by law and accordingly persons into whose possession this announcement is received are required to inform themselves about and to observe such restrictions.

 

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures referring to past performance and past performance should not be considered a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

 

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may",

"might", "will" or "should" or, in each case, their negative or other variations or similar expressions. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy and objectives, are forward-looking statements. Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those that will be described in the Prospectus once published. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. Subject to their respective legal and regulatory obligations (including under the Prospectus Regulation Rules), the Company, the AIFM, the Investment Manager and Winterflood Securities Limited expressly disclaim any obligations or undertaking to update or revise any forward-looking statements contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based unless required to do so by law or any appropriate regulatory authority, including the Financial Services and Markets Act 2000 ("FSMA"), the listing rules made by the FCA under section 73A of FSMA (the "Listing Rules"), the rules and regulations made by the FCA under Part VI of FSMA as amended from time to time (the "Prospectus Regulation Rules"), the disclosure guidance and transparency rules made by the FCA under Part VI of FSMA (the "Disclosure Guidance and Transparency Rules"), the UK version of Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by The Prospectus (Amendment, etc) (EU Exit) Regulations 2019 (the "Prospectus Regulation") and the UK version of on market abuse which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended the Market Abuse Regulation (EU) No. 596/2014 ("MAR").

 

None of the Company, the Investment Manager, Winterflood Securities Limited, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. The Company, the AIFM, the Investment Manager and Winterflood Securities Limited, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

 

Information to Distributors

 

Solely for the purposes of the product governance requirements contained within PROD 3 of the PROD Sourcebook (the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval process, which has determined that the Ordinary Shares to be issued pursuant to the Initial Issue are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in COB 3.5 and 3.6 of the FCA's Conduct of Business Sourcebook; and (ii) eligible for distribution through all distribution channels as are permitted by the Product Governance Requirements (the "Target Market Assessment").

 

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to

bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the

requirements of any contractual, legal or regulatory selling restrictions in relation to the Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Winterflood Securities Limited will only procure investors who meet the criteria of professional clients and eligible counterparties.

 

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of

suitability or appropriateness for the purposes of the FCA's Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares.

 

Each distributor is responsible for undertaking its own target market assessment in respect of the Ordinary Shares and determining appropriate distribution channels.

 

PRIIPS (as defined below)

 

ln accordance with the UK version of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products and its implementing and delegated acts which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (the "PRIIPs Regulation"), the AIFM will prepare a key information document (the "KID") in respect of the Ordinary Shares. The KID will be made available by the AIFM to "retail investors" at the same time as the publication of the Prospectus and prior to them making an investment decision in respect of the Ordinary Shares at www.liontrust.co.uk/esgt-launch. If you are distributing Ordinary Shares, it is your responsibility to ensure that the KID is provided to any clients that are "retail clients".

 

The AIFM is the only manufacturer of the Ordinary Shares for the purposes of the PRIIPs Regulation and Winterflood Securities Limited is not a manufacturer for these purposes. Winterflood Securities Limited makes no representations, express or implied, or accepts any responsibility whatsoever for the contents of the KIDs prepared by the AIFM nor accepts any responsibility to update the contents of the KID in accordance with the PRIIPs Regulation, to undertake any review processes in relation thereto or to provide the KID to future distributors of Ordinary Shares. Winterflood Securities Limited and its affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of the key information document prepared by the AIFM.

 

Investors should note that the procedure for calculating the risks, costs and potential returns in the KID are prescribed by laws. The figures in the KID may not reflect actual returns for the Company and anticipated performance returns cannot be guaranteed.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
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