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4 Feb 2007

Ethically Minded Investments & Hedge Funds

Growing concerns over issues such as global warming have meant that more investors are looking for an ethically minded fund, especially one that makes a profit.

An innovator in ethical investing is Charlie Thomas, head of Jupiter Asset Management, a Citywire AAA-rated hedge fund. Thomas has defied skeptics by proving environmentally friendly investing can produce strong returns in what was a relatively muted year for global fund managers.

Last year the average hedge fund manager return was 8.1%, way below the average gain of 26.5 percent in 2005. However, Thomas' hedge fund Jupiter, returned 27.8% on the Jupiter Ecology fund last year, bringing the hedge fund's assets under management to around $436 million.

Thomas, who has been a member of Jupiter's socially responsible investment team since 2000, has a background steeped in environmentally responsible behaviour. Prior to joining Jupiter, he worked for BP as an environmental policy adviser and also worked on the United Nations environmental programme.

He told Citywire: "I look for opportunistic companies which are addressing environmental change." Especially productive was his investment in the organic market, he said, "it is gaining momentum as more and more people want organic, high quality products." He screens stocks on six green investment themes: clean energy, sustainable living, green transport, waste management, environmental services and water management.

Thomas recently told Citywire he was heartened by news the European Commission wants to make its recent proposals on energy security and climate change, including a proposal to cut CO2 emissions by a least 20 percent, legally binding in 2020.

While this isn’t the usual criterion on which most investors make decisions, according to Standard and Poor’s, this ethically minded hedge fund has made a bid-to-bid return of 82.87% against the sector average of 48.88% over the three years to 2006.

German Finance Minister Takes A Closer Look at Hedge Funds

German Finance Minister Peer Steinbrueck will push for more oversight of hedge funds at this week's G7 meeting in Essen, Germany. In particular, Steinbrueck wants banks to disclose to regulators how much money they lend to the hedge funds, it was reported by Spiegel magazine.

Germany would like greater control over the highly speculative funds in the interests of the international financial system, and has promised to make this a priority of its G8 presidency. Germany is at the core of the euro single currency zone and the European Central Bank is building a huge new headquarters in Frankfurt.

Major German corporations have adeptly ridden the wave of globalization and exports continue to soar even during 2006 with the euro hitting near-record highs against the dollar.

Steinbrueck has been a Social Democrat for more than 35 years, he began his political career in the federal Ministry of Construction in 1974, and has since been riding high as finance minister, having presided over a cut in Germany's budget deficit to bring it in line with the eurozone's strict fiscal target for the first time since 2001.