The University of Cambridge’s investment manager has launched sustainability principles for hedge fund managers, seeking to strengthen climate engagement and improve emissions transparency across its portfolio, according to responsible investor. 

University of Cambridge Investment Management (UCIM), which oversees the university’s £5.5bn endowment, is encouraging other asset owners to support the framework, which sets out expectations for managers based on their investment strategies and capacity to influence real-world decarbonisation.

The principles focus on four areas: climate expectations, targeted engagement, strategy-specific approaches and improved emissions disclosure.

UCIM has committed to achieving net-zero greenhouse gas emissions across its portfolio by 2038 and eliminating meaningful exposure to fossil fuels by 2030. Absolute-return and credit strategies account for more than a fifth of the endowment.

The framework takes a differentiated approach, with managers able to exert greater influence expected to adopt stronger commitments, including fossil fuel restrictions and structured engagement programmes. For other strategies, the emphasis is on limiting new funding for fossil fuel activities and improving transparency.

UCIM said the initiative had received a positive response from managers, although some had requested further clarification before signing up. The endowment plans to prioritise engagement but retains the option to terminate relationships where progress remains insufficient.

The initiative aims to provide institutional investors with a practical framework for integrating climate objectives into hedge fund allocations while recognising the differences between investment strategies.