Federated Hermes has closed two funds within its sustainable fund line-up due to poor performance, while portfolio manager Ingrid Kukuljan has left the firm.
The investment manager informed shareholders on 30 April that two of its funds – the Impact Opportunities Equity fund and the Biodiversity Equity fund – would close, effective from 3 June 2025.
Kukuljan, who has led the Impact Opportunities fund since September 2020 and the Biodiversity Equity fund since its launch in March 2022, will leave the investment manager to pursue new opportunities, a Federated Hermes spokesperson confirmed, saying “we wish her the very best for the future”.
In the case of the Impact Opportunities Equity fund, the directors decided to close the fund due to “significant redemptions” from the fund over the last two years, and a lack of expectation that the fund could reverse the trend and grow its AUM.
The fund aimed to achieve long-term capital appreciation by investing in companies expected to benefit from meeting the world’s environmental and social challenges. However, according to FE Fundinfo data, the fund is firmly in the bottom quartile for performance when ranked among its peers over a one, three and five-year period, lagging behind the IA Global fund sector by 59.5% over five years.
Meanwhile, the largest shareholder in the Biodiversity Equity fund redeemed their shares, meaning the fund fell below the level at which it could be considered cost-effective to operate.
The fund aimed to achieve capital growth over a rolling five-year period, but has closed after just three years of activity, landing in the bottom quartile for performance over both one and three-year periods.
Martin Todd, who was co-manager of the Impact Opportunities Equity fund, will manage the winddown of both funds.
