SEDCO, Lombard Odier launch ESG-focused sharia-compliant fund

DUBAI,  (Reuters) – Saudi Arabia’s financial firm SEDCO Capital and Switzerland’s Lombard Odier have launched an ESG-focused sharia-compliant fund to invest in developed market equities, they said on Wednesday.

Global investors are increasingly driven by environmental, social and governance-related (ESG) factors, seen by the $2.2 trillion Islamic finance industry as complementary to sharia principles on social and sustainable investing.

The fund “will employ a pragmatic, systematic, and multi-factor approach that aligns Shariah-compliant, responsible investment, and sustainability principles to construct a portfolio with a high ESG score”, the two firms said in a joint statement.

Jeddah-headquartered SEDCO Capital, an asset management and investment advisory firm overseeing more than $5 billion in assets, will manage the fund, called SC LO Global ESG Equities Fund.

Swiss private banking and asset management group Lombard Odier will work as investment adviser.

Fund managers in the Gulf expect strong growth over the next year supported by growing demand for Islamic products and ESG investment, a survey by ratings agency Moody’s showed this month.

Reporting by Davide Barbuscia; editing by Jason Neely

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