California Clean Energy Fund (CalCEF) Innovations, is requesting proposals from sustainable financial advisors and fund management companies that specialize in the development of climate-aligned listed equity funds, and the marketing of those investment products to US-based retail and institutional investors.
CalCEF Innovations is a 501c3 California non-profit public benefit corporation launched by the California Clean Energy Fund in 2008, with the mission of designing and piloting business models, financial products and public policies to accelerate the clean energy market growth and the adoption of clean energy technologies. It has the ambitious goal to support 100,000 diverse clean energy entrepreneurs by 2030. Current program activities include:
- Global network of clean energy incubators and accelerators, including network nodes in Indonesia, Thailand, Vietnam, the Philippines, China, Uganda, Nigeria, Australia, and India, as well as in New York State;
- Outreach and education activity to connect stakeholders to overcome barriers in clean energy markets;
- Pilot projects in selected marketplaces to drive a shift of financial flows from dirty to clean energy, through market assessment, research, product development and deployment of climate-friendly investment products and de-risking tools.
Globally, investment activities are increasingly managed by a passive investment approach, where an equity fund’s portfolio tracks a market index. By the end of 2021, passively managed U.S. equity funds overtook their actively managed counterparts for the first time. 1
With the rise of passive asset management comes both challenges and opportunities for scaling climate finance. By tracking indices that are not aligned with Paris climate goals, passive investing may create a consistent flow of capital to carbon-intensive industries and companies that exacerbate the climate crisis. 2 On the other hand, passively managed climate-aligned funds can help unlock significant climate finance for companies that are building climate solutions for the future, while still offering investment products with the low-fees generally associated with passive investing.
China, currently the world’s largest GHG emitter, is also home to a thriving market for climate solutions. Mobilizing finance for this important set of climate solutions companies is vital to solving the global climate crisis. Despite being the second largest capital market in the world, China A-shares remain underrepresented in investor portfolios – the weight of onshore Chinese equities in the MSCI Emerging Market Index is only about 5%. 3
The purpose of this Request for Proposal (RFP) is to expand China-focused climate-aligned investment product offerings for the US market through the development of a climate-solution thematic fund product – in the form of an ETF, Index Fund or Mutual Fund (hereinafter referred to as “the Fund”) 4. The Fund will track a designated Chinese Climate Index 5 that consists of the top 100 climate solutions companies publicly listed in China.
The RFP will offer a sponsorship of up to US$300,000 to deliver the Fund. All work required for regulatory approval must be concluded by October 31, 2023.
Project goals and deliverables
CalCEF Innovations seeks to identify and support an experienced sustainable finance firm with a sponsorship of up to $300,000 for an US-based market launch of the Fund. We seek firms who can:
- Develop a climate-friendly fund investment product in the form of an Index Fund, ETF, or Mutual Fund (“the Fund”), tracking a designated Chinese A-shares Climate Index 6. In particular, the Fund should be easily accessible to retail and institutional investors in the US market. Special consideration will be given to proposals offering a shareholder voting service for the Fund (or an appropriate active engagement approach feasible in the context of engaging Chinese listed companies).
- Prepare relevant legal documents for the Fund and submit to the appropriate regulatory bodies for product launch approval in the US market.
- Launch and maintain the Fund to US retail and institutional investors, with a target AUM of US$100 million to be raised.
Who should apply
- Organizations that research, analyse, advise, and/or pursue the practical applications of sustainable investment geared towards climate mitigation solutions.
- Organizations that have experience in designing and launching Index Funds, ETFs or Mutual Funds in the US market.
- Organizations located in the US.
Criteria for Decision-Making
- Proven track record in listed equity fund development.
- Climate impact expertise.
- Chinese A-Shares market knowledge.
- Representation of women, underrepresented racialised groups, and other traditionally excluded communities in senior leadership and on the Board of Directors, or organizations that commit to Due Diligence 2.0.
- In-house “Justice, Equity, Diversity, and Inclusion” (JEDI) or DEI policy in place.
Interested service providers are requested to prepare a project proposal with information on (1) corporate profile, relevant expertise/capacity, and project experience; (2) proposed structure of the Fund and other key configurations; (3) proposed workflow with key milestones;(4) a budget (with detailed cost breakdown) and tentative implementation schedule; and submit to CalCEF Innovations ([email protected]) by March 31, 2023.
Due Diligence Screening
By submitting a proposal, the interested party agrees to make further information available about the institution, its staff and other pertinent information (e.g. reference checks) as part of due diligence screen prior to execution of a binding agreement.
The terms and conditions of engagement may be further negotiated with shortlisted candidate(s), in order to fulfill the missions and sponsorship requirements set by CalCEF Innovations.
- One example: Carbon Collective Climate Solutions U.S. Equity ETF https://www.carboncollectivefunds.com
- https://www.csindex.com.cn/#/indices/family/detail?indexCode=932074 The Chinese Climate Index composes a tailored investment portfolio of selected A-share listed companies that are building solutions to climate change.
To place your RFP ad in ImpactAlpha, please contact Zuleyma Bebell at [email protected].