European institutional investors represented by Eurizon Capital Asia, a unit of the Intessa Sanpaolo Group, are eager to tap environmental, social, and governance (ESG) equity and fixed-income assets in China as part of the global trend towards investing in clean energy.

Sean Debow, chief executive officer of Eurizon Capital Asia, says: “China is growing its GDP at roughly 6-8%, which requires an enormous amount of incremental energy. That energy can be from new energy, clean energy, or it can be from fossil base. And obviously they’re doing all they can to change the incremental demand to be clean-based. So that itself is an opportunity and that’s why we have meaningful positions in solar-related, wind-related, and hydro-related companies as well as the companies that make the components that go into that.”

Eurizon has US$118 billion of assets under management (AUM) in ESG/SRI funds (managed globally). Investors are predominantly European institutions who are investing through Luxembourg and Milan-based funds.

In Hong Kong, Eurizon Capital Asia manages and advises in excess of US$1 billion of Asian assets and manages three equity funds including one equity China A-share fund, an Asian equity fund, and an Emerging Market fund. The company has a Chinese-speaking team in London managing a US$3 billion-plus bond aggregate renminbi fund. Eurizon had total AUM of €425.8 billion (US$503.12 billion) as of June 30 2021, up by €8.7 billion since the beginning of the year.

“I think that it’s really exciting if you think about being able to first give our investors the opportunity to invest in such a clean and sustainable growth, also with very attractive investment returns,” Debow says. “Since 1996, Eurizon has engaged in ethical, SRI and ESG investing and is the leader in Italy for sustainable and responsible funds. All active Eurizon products are subject to a screening process to limit or exclude securities that are non-socially responsible or critical issuers.”

Eurizon also hopes to leverage the capabilities of Penghua Fund Management, its Shenzhen-based joint venture which currently has US$120 billion in AUM. Penghua is active in the management of funds under the Qualified Domestic Institutional Investor (QDII) scheme and separately managed accounts.

“We are focusing on two business lines right now, which is to manage assets in Asia and distribute those assets all through our client base which is predominantly in Europe. The second part of our business is to offer the wide variety of our portfolio to investors residing in Asia. We’re the largest provider of pension assets in all of Italy, institutional investors including wealth managers, including the pension fund market, the sovereign wealth fund market, insurance market, private banking, and others,” Debow adds.