July 8, 2008 - Banking giant HSBC is set to launch a new hedge fund targeting the "frontier" market for environmental technologies and green infrastructure, Reuters reports. HSBC chief executive Mark Macombe says the fund will use computer-driven models to allocate actively between markets such as Vietnam, Indonesia and African countries - areas of increasing investor interest in recent years.

"We have quite a strong indexing capability. One of the things we're looking at is using (that) to do some things around new frontiers to expand out that product range," according to Macombe. "We would do the asset allocation, they would get the index on the basis of the quant models."

Environmental technology funds have become more popular as issues around climate change are increasingly stealing the spotlight; however, few funds have actually adopted such specific concentrations.

HSBC is trying to change that - but Macombe counsels patience. "This is a slow burn," he says. "This is something that will take many years to build into the investment psyche of your average retail investor because it's still seen as something little understood or a political issue as opposed to an opportunity for corporations to gain benefit."

HSBC says fund may be launched in the next couple of months.

In September, HSBC launched a stock index to help investors track the performance of 300 companies poised to profit from the challenges presented by climate change.