February 07, 2003
Prince Albert of Monaco Helps Launch a New Sustainability Fund
by William Baue
Instead of investing directly in equities, this new "fund of funds" from Monaco invests in SRI and
In Monaco last week, Prince Albert announced the launch of a new socially responsible investing
(SRI) fund, the Monaco Environment Developpment Durable (MEDD). The fund was created by Sustainability Investments LLC
(SILLC) and Credit Foncier de
Monaco (CFM). In addition to providing the initial impetus for the fund, the Monaco government
provided seed money to ensure the successful launch of the fund.
"Prince Albert was
the driving force behind the creation and the launch of this fund--it's really the reflection of
his desire to contribute to the movement toward global sustainability," said SILLC President Jerome
de Bontin. "Being in a very tourist-oriented part of the world and being between the sea and the
mountains, Monaco is directly exposed to risks such as global warming and its impact on sea level.'
SILLC was initially mandated by the Monaco Government to write the investment philosophy,
structure the product, and find a local banking partner and as well as an asset manager. SILLC
tapped Credit Agricole Asset
Management, which is known as a "green" bank in France, as asset manager, and chose its
subsidiary, Credit Foncier de Monaco, the largest bank in Monaco, as the local depository
SILLC designed MEDD as a fund of funds. Instead of investing directly in
equities, MEDD invests in SRI or sustainability funds that invest exclusively in equities. The
global orientation prompted SILLC to allocate up to 70 percent of MEDD in large-capitalization
companies. However, many companies practicing sustainability have yet to reach large-cap status,
so SILLC allocates up to 40 percent of the fund in small-capitalization companies.
such as renewable energies or health food are still emerging at a low level of capitalization, and
so are not accessible through large-cap investment," Mr. de Bontin told SocialFunds.com. "That's
why we feel it's important for the fund to invest in smaller companies via a proportion that's
As of January 31, MEDD invested its assets of more than €20
million in such SRI funds as the SAM Sustainability Index Fund (23 percent), the Storebrand Global
Fund (13 percent) and the Pictet Global Water Fund (3 percent), though these percentages can
CFM handles retail clientele in Monaco, while SILLC is distributing the product to
retail clientele outside Monaco as well as institutional investors in and outside Monaco.
Institutional shares, which require a minimum investment €300,000, are charged 80 basis points
and an up-front sales fee of up to one percent, with no fee when the fund is sold. A feeder fund
for retail investors, which carries a minimum investment of €1,000, charges 1.5 percent a year
with up-front sales fees of up to 3 percent and no fees when the fund is sold.
goal of the MEDD fund is to provide a solid financial return for investors, Prince Albert clearly
is hoping the world will benefit from the fund's promotion of sustainability. Monaco may be home
of some of the world's most famous casinos, but the Monaco government has revealed it does not want
to gamble with the future health of the global environment.