Carbon Advice Group to launch sustainability fund
Consultants want to fill gap in the market with launch of new fund, aimed at the smaller investor.
The Carbon Advice Group is in the process of setting up a sustainability open-ended fund, with the aim of launching in early September.
Matthew Sullivan, chief executive of the Carbon Advice Group, claimed the fund will enable "the average guy on the street" to buy directly into renewable energy, carbon credits and deforestation projects around the world.
Mr Sullivan is hoping to place the fund on various IFA platforms, but claimed the challenge was whether the fund gets authorised by the Financial Services Authority (FSA) because carbon credits, like property, are not a regulated investment.
He said: "By that I mean it is not on their list of things that would qualify as an authorised fund. If it becomes authorised, it can sit on the various IFA platforms. If it is not it makes it more difficult as it needs be FSA-authorised to sit on a platform.
"It can be marketed in the same way as property as that is not a regulated investment so it will be very similar to a property fund in the way that it is structured."
Mr Sullivan believes this will be popular with IFAs as they can tell their clients that they are investing in "something that is ethical; pure, in the sense of you are not investing in a company that may do something ethical, but you are investing in a pure ethical unit".
He said: "I think IFAs are looking for something interesting, ethical and something that they can easily articulate to their clients but as more and more people understand what carbon credits are, their job will get easier and it is a lot easier now than it was three years ago."
Mr Sullivan claims there are no real products in the market that are targeted at the smaller investor.
He said: "It is exciting for an investor as it is new, high risk because we don't know which way the market will grow and it is not as mature as other markets but with a carbon credit it will very unlikely you will lose your money.
"It is not like the company can go bust - once you have a carbon credit you have that tonne of carbon dioxide offset but still tradeable.
"It is like a commodity, the price may go down but it is not like it will cease to exist. It is risky and it is volatile but this is all stuff that is manageable."