A new ESG-focused distressed and event driven credit hedge fund run by US manager DSC Meridian has launched with backing from Investcorp-Tages, the asset management seeder.
The Climate Action Fund builds on DSC Meridian’s flagship Credit Opportunities Fund, using an ESG (environment, social, governance) overlay with a specific focus on decarbonisation. The strategy aims to strengthen overall risk management through corporate engagement, unlocking idiosyncratic ESG value and aligning portfolio companies with climate standards set by the Paris Climate Agreement and UNPRI.
Founded in 2018 by Sheru Chowdhry, ex-head of credit research & co-portfolio manager of the Paulson Credit Fund, DSC Meridian focuses on distressed and event-driven credit investing. Its new Climate Action Fund is said to be the first distressed and event driven hedge fund to launch with ESG investing targets.
As part of this sustainability drive, the firm has appointed Paula Luff as director of ESG research and engagement. A sustainable finance and corporate engagement veteran who developed sustainability programmes at several pharmaceutical and energy multinationals, Luff joins DSC Meridian from Inherent Group, where she directed the development of an ESG platform.
Chowdhry welcomed the Investcorp-Tages seeding, commenting: “We believe this is the right time to engage with high yield companies on ESG and sustainability issues.”
The Investcorp-Tages multi-manager joint venture was launched in May 2020 by Investcorp and Tages Capital, with a view to building a global absolute return platform with more than USD6 billion in revenue generating assets, including customised portfolios, seeding and other investment products.
Salvatore Cordaro, co-CEO of Investcorp-Tages, hailed DSC Meridian’s size and “deep credit expertise” as an advantage in driving its ESG mission.
“At Investcorp-Tages we pride ourselves on our commitment to ESG and impact investing and we are convinced that our seeding practice is a powerful tool in this regard. With firmwide ESG integration and the most recent launch of the CAF, DSC Meridian is a prime example of this. Through the allocation of seed capital we are able to support a uniquely qualified and highly driven team in bringing an ESG focus to an area where it has long been needed.”
