HSBC to set up joint fund targeting emerging-market issuers

THE asset management unit of HSBC Holdings is teaming up with International Finance Corp (IFC) to create a joint fund designed to support corporate bond issuers in emerging markets.

The fund, which will carry the European Union’s strictest sustainability designation – known as Article 9 – is being set up with a view to mobilising additional institutional investors and increasing the pool of capital available to emerging market issuers pursuing sustainable goals, according to a statement published on Wednesday (Oct 2) by HSBC and IFC, a member of the World Bank Group.

“We hope this collaboration demonstrates the financial market opportunity in funding sustainability to help bridge the financing gap for EM corporate issuers whose activities are aligned with and positively contribute to the UN’s Sustainable Development Goals,” Nicolas Moreau, the chief executive of HSBC Asset Management, said in the statement.

The fund will invest in publicly listed bonds issued by corporate and financial institutions in emerging markets, with a view to financing areas such as sustainable technologies and social impact. The arrangement extends an ongoing collaboration between HSBC and IFC that dates back to 2019.

The decision to register the fund as an Article nine product “places a strong emphasis on issuer-level sustainability and transparency beyond just an issuance’s use-of-proceeds,” Mohamed Gouled, vice-president of Industries at IFC, said in the statement. “IFC’s investment is expected to mobilise additional institutional investors and increase the pool of capital dedicated to sustainability-related transactions in emerging markets.” BLOOMBERG