Boutique asset manager Red Ribbon is incorporating BlackRock ESG ETFs as part of its newly-launched multi-asset impact investment note.
The seven-year securitisation note will allocate 10% of its portfolio to the BlackRock ETFs and is planning to raise €300m over its lifespan.
Alongside the ETFs, the note will invest in eight stocks and five Red Ribbon Funds spanning emerging markets and emerging technology with a focus on real estate and fintech.
It will look to make an impact by aiming to deliver financial inclusiveness and financial literacy across emerging markets.
Suchit Punnose, CEO of Red Ribbon AM, said: “We are pleased to work alongside BlackRock, the world’s largest asset manager, providing their insights for our ESG strategies to combine alpha-generating performance while improving the world.”
The group said BlackRock has not invested directly into the fund but added it is “exploring the option” with the fund giant.
The note has a five-year lock-in period and targets an annual coupon of 8.75% with a minimum investment of €100,000.
Note holders will also gain exposure to the capital growth of the underlying projects and funds, realisable by conversion into ordinary shares at a Red Ribbon IPO between years five and seven.
It estimates cash-on-cash returns of 2.1x based on an IPO valuation of 12x Ebitda in year seven.
Shard Capital is acting as the security agent on the note.