Goldman Sachs and Drexel Hamilton recently announced the launch of two new money market funds: Drexel Hamilton share classes of the Goldman Sachs Financial Square Government Market Fund (VETXX) and GS Financial Square Prime Obligations Money Market Fund (VTNXX). According to a statement, "These share classes achieve the benefits of Sustainability and Impact investing. The funds generate competitive financial returns and create positive social impact for Drexel Hamilton's mission of training and employing disabled veterans." We review this news, as well as some other developments in the ESG and Social money fund and cash investing space, below. (Note: Thanks those who attended Crane's Money Fund University, which took place Thursday and Friday in Providence! Attendees and Crane Data subscribers may access our conference materials at the bottom of our "Content" page or our via our Money Fund University 2020 Download Center. Safe travels home!)
John Martinko, the president of Drexel Hamilton discussed the new funds on CNBC's "The Exchange," explaining, "These two share classes VETXX, cleverly named, and VTNXX are share classes of the parent Financial Square classes of Goldman Sachs. There's been a lot of commentary even today on Goldman, but I will tell you that Goldman Sachs has given us this first half of this trade. They've reached down into our veteran ranks and pulled us up to have a seat at their table for this opportunity to help corporations and municipalities and states satisfy those social governance goals of investing with military veterans. So Goldman ... I cannot thank them enough, and the corporations and the demand there."
In related news, a press release entitled, "Tiedemann Advisors to Offer an Impact-Investing Cash Solution," tells us, "Tiedemann Advisors is offering a new program to help clients put their cash to work in impact investment, the New York-based independent investment and wealth advisors announced on Wednesday. This program, called FICA (short for Federally Insured Cash Account) Impact, will allow investors to invest in more than 700 community banks across the U.S.... The cash solution is enabled through StoneCastle Cash Management, LLC."
Tiedemann's Brad Harrison comments, "Cash has traditionally been held at large financial institutions, which don't necessarily have socially responsible lending criteria that align to core values of our clients.... The real advancement of financial technology enables us to allocate cash to this network of 700 different community banks to unlock impact opportunities in communities nationwide.... What's interesting, he says, is that FICA Impact has similar yields and liquidity as money market accounts at large financial institutions."
Also, UBS Asset Management recently posted a "Statement of Additional Information" which provides some details on their pending UBS Select ESG Prime Fund. The filing says about UBS Select ESG Prime Institutional Fund, UBS Select ESG Prime Preferred Fund and UBS Select ESG Prime Investor Fund, "Each fund's investment objective is to earn maximum current income as is consistent with liquidity and preservation of capital while incorporating select environmental, social, and governance criteria ('ESG') into the investment process. Under normal circumstances, each fund invests at least 80% of its net assets ... in securities that meet UBS AM's sustainability criteria. In developing its sustainability criteria, UBS AM draws upon firm-wide resources of the UBS Asset Management Division of UBS Group AG, of which UBS AM is a member."
It explains, "Each fund's investments include (1) US and non-US government securities, (2) obligations of issuers in the financial services group of industries, (3) commercial paper and other short-term obligations of US and non-US corporations, partnerships, trusts and similar entities, (4) funding agreements and other insurance company obligations, (5) repurchase agreements, (6) investment company securities, and (7) municipal money market instruments." The fund is expected to go live in coming weeks.
Finally, a press release entitled, "Credit Suisse arranges the industry's first green ABCP note," tells us, "Credit Suisse today announces the successful inaugural issuance of a green Asset-Backed Commercial Paper (ABCP) note, raising USD 200 million. Credit Suisse understands this to be the industry's first green ABCP note. The note was issued by Alpine Securitization (a special purpose vehicle sponsored by Credit Suisse to issue ABCP)."
It adds, "Credit Suisse independently sourced the solar assets financed by the proceeds of this green ABCP issuance. The assets will be distinct from the asset pool used for Credit Suisse's Yankee Certificates of Deposit (YCD) green issuances, which were announced last year.... In June 2019, Credit Suisse announced the inaugural issuance of green Yankee Certificates of Deposit (YCD), raising $200 million in proceeds."
According to Crane Data's most recent MFI XLS, Social MMFs total $5.0 billion and include (largest share classes only listed): Dreyfus Govt Sec Cash Instit (DIPXX, $3.3B) and Goldman Sachs FS Fed Instr Inst (FIRXX, $1.7B). ESG MMFs hold $5.6B and include: BlackRock LEAF Direct (LEDXX, $800M), DWS ESG Liquidity Cap (ESIXX, $300M), Morgan Stanley Inst Liq ESG MMP I (MPUXX, $3.6B) and State Street ESG Liq Res Prem (ELRXX, $880M). (UBS Select ESG Prime Inst Fund is pending.)
For more on ESG and Social Money Market Funds, see these Crane Data News articles: Mischler Financial Joins "Impact" or Social Money Market Investing Wave (12/5/19), BNP Insticash Adds ESG Overlay (11/29/19), Dreyfus Launches "Impact" or Diversity Government Money Market Fund (11/21/19), Goldman Adds ESG Screen (11/14/19), Aviva Investors Discusses ESG MMFs; Fitch Rates MS ESG (11/6/19), UBS Asset Mgmt Files to Launch Select ESG Prime Institutional Fund (11/4/19), BlackRock Launches First Offshore ESG MMF; ICS LEAF in EUR, GBP, USD (7/22/19), SSGA Goes Live with ESG Money Market Fund (7/3/19) and Cap Advisors Group Demystifies ESG Investing (6/19/19).
