An NYC Shop Bets On Carbon Offsets and Transformation
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Wednesday, April 27, 2022

An NYC Shop Bets On Carbon Offsets and Transformation

A Gotham fund firm is rolling out a pair of new funds focused on different aspects of tackling climate change.

Jonathan Krane
Founder, CEO
Yesterday, Luke Oliver, managing director and head of strategy at Krane Funds Advisors, LLC (dba KraneShares [profile]), and Eron Bloomgarden, co-founder of Climate Finance Partners (CLIFI), unveiled the impending launch of the KraneShares Global Carbon Offset Strategy ETF (KSET). KSET's launch comes about a month after the KraneShares team unveiled the launch of the KraneShares Global Carbon Transformation ETF (KGHG).

KSET, which debuts today on the NYSE Arca, Inc., comes with an expense ratio of 79 basis points. CLIFI serves as its non-discretionary investment subadvisor, and KraneShares' James Maund (head of capital markets) and Jonathan Shelon) (chief operating officer) serve as its PMs. Their strategy will mainly involve investing in futures contracts on carbon offset credits.

Oliver describes KSET as "a timely expansion of the KraneShares Climate Investment suite." Bloomgarden puts the launch in the context of the importance of "voluntary carbon markets" in the climate change fight.

KGHG, which debuted on March 16 and had grown to $2.485 million in AUM as of yesterday, comes with an expense ratio of 89 bps. Oliver and new hire Roger Mortimer will PM the new fund, which will invest mainly in companies that are carbon emission reducers.

Mortimer puts the launch of KGHG in the context of the Russian invasion of Ukraine bringing "the risk of energy dependency into sharp focus."

"KGHG will invest in companies around the world that are seeking to lead the race to decarbonize," Mortimer states.

"The climate crisis remains one of the most significant long-term challenges facing the global community," Oliver states. "Investing in companies with the commitment to change and lead — not just the cleanest companies today — may be one of the most impactful ways to rebuild a greener, more resilient economy."

Both new funds are series of the KraneShares Trust, with Krane Funds Advisors as their investment advisors. The new funds' other service providers include: Brown Brothers Harriman & Co. (BBH) as custodian and transfer agent; K&L Gates LLP as counsel; KPMG LLP as independent accounting firm; SEI Investments Distribution Co. as distributor; and SEI Investments Global Funds Services as administrator.

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