Article9 funds are funds that have sustainable investment as its objective. The ambition of the EU SFDR is that the categorisation of funds should allow European investors to better understand, and direct capital to, funds with a sustainable investment objective, and thereby support companies that contribute to sustainable objectives.

ūüí™A natural question to ask, then, is to what extent Article 9 equity funds actually support the capital raises of such companies. Through an analysis of the publicly available holdings of the top Article 9 funds (funds with more than $500mn in assets), we have tried to answer the question: do Article 9 funds participate in IPOs?

ūüďČThe answer is: very little! Of 157 funds that we analysed, only 30% participated in at least one (!) IPO over the entire 2019-2022 period ‚Äď meaning that 70% of the funds participated in none ‚Äď zero! Compare this with our analysis of the opportunity set: there were 126 IPOs globally of energy transition companies that would have been relevant for these funds over the period, raising a total of US$81bn.

⚡The most popular IPO among the Article 9 funds was the IPO of ACCIONA Energía, a Spanish renewable energy developer that spun-off from its parent ACCIONA in 2021. The IPO was very popular, thanks to its listed peer EDP Renewables providing a simple valuation comparable.