July 30, 2018
DUE DILIGENCE Alert: MODERATE
COMPETITIVE Alert: 2
Event: Co-Head of responsible investing announced for MAN Group.
Briefing Points: i) Jason Mitchell is MAN Group’s new co-head of responsible investing, a position he will share with Steven Desmyter who will focus on client- and corporate-level efforts in the same area: ii) Mr. Mitchell’s main responsibility is to “ensure the firm’s investment processes follow ESG principles” and to develop strategies including, impact, thematic, and ESG factor integration: iii) Mr. Mitchell was previously a sustainable strategist at MAN.
Affected Fund(s): All MAN Group funds, strategies, and SMAs
Asset Classes: All US and Non-US Equities and Fixed-Income
Management Company: MAN Group plc (London, UK)
DD Concern: Competitive strategic move and repositioning
Marketing Considerations: The firm’s international and institutional presence can be expected to gain traction, although its US retail status is not likely to benefit in the near-to-mid-term. The elevation of the “co-head” positions to the corporate level suggests a serious corporate-wide commitment to the sustainable space as well as the likelihood of increased resource allocation to advance the initiative.
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July 27, 2018
DUE DILIGENCE Alert: MODERATE
COMPETITIVE Alert: 2
Event: Latin American ESG fund opened in Chile.
Briefing Points: i) The Chilean-registered fund is designed to hold 90% of its portfolio in Latin American stocks: ii) The fund is indexed against the MSCI EM Latin America ESG Leaders Index: iii) The fund is targeted to local and international retail and institutional investors – the manager is planning to clone the fund as a Luxembourg-registered SICAV.
Affected Fund(s): Fondo Mutuo Euroamerica ESG Latam
Asset Classes: Non-US Equities
Management Company: Euroamerica AGF (Santiago, Chile)
DD Concern: Cash flow/liquidity management
Marketing Considerations: While not expected to be available to US citizens anytime soon, the fund may have appeal to resident aliens. In the near term, there have been discussions regarding Euroamerica’s parent company being acquired by Zurich Insurance of Switzerland. This would add weight in the non-US marketplace, and eventually in the US. But this acquisition has not been finalized as of this time.
July 26, 2018
DUE DILIGENCE Alert: HIGH
Competitive Alert: 2
Event: Financing for the socially-conscious fintech platform OpenInvest.
Briefing Points: i) The socially-conscious RoboAdvisor, OpenInvest, has raised about $10.4 million in start-up capital: ii) OpenInvest is a wealth management platform that offers tools allowing investors and advisors to build portfolios comprised of companies with solid ESG standings: iii) Investors in the start-up are reported as being largely comprised of Silicon Valley investors.
Affected Fund(s): OpenInvest Wrap Fee Program
Asset Classes: All
Management Company: Open Invest Co. (San Francisco, CA)
DD Concern: New untested mandate and/or management team
Marketing Considerations: The firm’s principals have a strong technology orientation, but their asset management and fund industry knowledge appears to be elementary. Their disdain for traditional intermediaries appears to be a little too dogmatic. The Robo-Advisor tilt is real and snazzy, but is expected to be tested during the next serious market contraction and it may lose luster.
July 25, 2018
DUE DILIGENCE Alert: MODERATE
COMPETITIVE Alert: 4
Event: Westwood Holdings signs on to United Nations PRI.
Briefing Points: i) Institutional manager Westwood has signed the Principles for Responsible Investing (PRI): ii) Westwood has established 2 internal committees to “ensure the strategic influence and leadership … to execute the PRI — a Corporate Responsibility Committee and a Responsible Investment Committee: iii) Westwood is a value-oriented manager with approximately $3.4 billion in institutional, intermediary and private wealth AUM.
Affected Fund(s): Westwood mutual funds, UCITs, and SMAs
Asset Classes: US and Non-US Equities
Management Company: Westwood Holdings Group, Inc. (Dallas, TX)
DD Concern: Company and fund product governance
Marketing Considerations: The company has taken a major step to strengthen and solidify its institutional market position including the intermediary base. In the immediate-term, the firm can be expected to reinforce its marketing strategy and visibility in the ESG area. An outreach to retail markets may be a longer-term play, if at all.
July 23, 2018
DUE DILIGENCE Alert: LOW
COMPETITIVE Alert: 2
Event: Global sustainability head appointed at BNP Paribas.
Briefing Points: i) Jane Ambachtsheer has been hired as BNPP’s head of global sustainability, replacing Gaeten Obert who recently passed away – BNPP is BNP Paribas’ parent (bank) company based in Paris: ii) Ms. Ambachtsheer who was previously with Mercer, will be responsible for all sustainable research, advocacy, governance and ESG integration throughout BNPP: iii) One of Ms. Ambachtsheer’s primary responsibilities is to help position BNPP as a “leading player in sustainable finance”.
Affected Fund(s): BNP Paribas Mutual Funds
Asset Classes: US and Non-US Equities and Fixed Income
Management Company: BNP Paribas Asset Management USA, Inc. (Jersey City, NJ)
DD Concern: Company or fund product governance
Marketing Considerations: The senior level hiring reflects BNP Paribas’ continued strong commitment to its global sustainability initiative and will serve to further solidify and make permanent the sustainability-oriented culture being cultivated at the firm and possibly BNP Paribas’ asset management arm. Even with the company’s European base, changes, if any, due to new leadership will likely also impact the US-based investment management operation.
July 20, 2018
Due DILIGENCE Alert: MODERATE
COMPETITIVE Alert: 3
Event: AXA Rosenberg hired by CalPERS to manage their global sustainable sleeve.
Briefing Points: i) CalPERS, the California public employees’ pension fund, has hired AXA Rosenberg Equities to run its “quant-driven” global sustainable equities account: ii) AXA Rosenberg is a value shop that utilizes quantitative pricing screens with an emphasis on ESG factors: iii) AXA Rosenberg currently manages about $19 billion and the new CalPERS account is estimated at about $1 bn.
Affected Fund(s): AXA Rosenberg Mutual Funds
Asset Classes: US and Non-US Equities
Management Company: AXA Rosenberg Group LLC (Orinda, CA)
DD Concern: Cash flow/liquidity management
Marketing Considerations: While the manager has the support of its international parent company, AXA IM, its experience with ESG investing is believed to be relatively limited. The benefits from the standpoint of the domestic retail market are less clear than on the institutional side, especially considering Rosenberg’s not so distant legal troubles.
July 18, 2018
DUE DILIGENCE Alert: MODERATE
COMPETITIVE Alert: 3
Event: Envest adds to its ESG model portfolio group.
Briefing Points: i) Envest, a model portfolio platform for advisor, B/D, and pension plans, has added a portfolio manager and research analyst to its manager selection team: ii) The additions are in anticipation of increased ESG offerings: iii) Envest currently offers 35 quantitatively-based model portfolios with over $3 billion in active and passively managed assets.
Affected Fund(s): Impact model portfolio platform
Asset Classes: All US and Non-US Equities and Fixed Income
Management Company: Envest PMC (Denver, CO)
DD Concern: Portfolio management team change
Marketing Considerations: New mandates in the sustainable investing arena is considered to be a positive move and one with permanency for the firm. However, whether it reflects a cultural move at the firm is yet to be seen.
July 18, 2018
DUE DILIGENCE Alert: HIGH
COMPETITIVE Alert: 2
Event: Impact Shares opening NAACP Empowerment ETF.
Briefing Points: i) The new ETF is a collaboration between Impact Shares and the NAACP, and is designed to support “racial equality among corporations”: ii) Impact Shares is a non-profit ETF manager who will employ 10 “social screens” to direct the fund’s investments to companies with records complementary to the NAACP’s mission.
Affected Fund(s): Impact Shares NAACP Minority Empowerment ETF (NACP)
Asset Classes: US Equities
Management Company: Impact Shares Corp. (Dallas, TX)
DD Concern: Consistency of investment analytics/research
Marketing Considerations: Being the first in the marketplace has its advantages. However, an untested and arguably narrow market niche may prove to be a limitation.
July 16, 2018
DUE DILIGENCE Alert: MODERATE
COMPETITIVE Alert: 3
EVENT: New sustainable fund from Impax.
Briefing Points: i) The new PAX Global Opportunities fund will focus on “companies positioned to benefit from the transition to a more sustainable global economy”: ii) The fund’s investment process seeks out high quality companies that have a “sustainable competitive advantage” and proven track record of at least 5 years as such: iii) The fund is the first offered by Impax since it acquired PAX World Management in January of 2018.
Affected Fund(s): PAX Global Opportunities Fund (PXGOX)
Asset Classes: US and NON-US Equities
Management Company: Impax Asset Management LLC (London, UK)
DD Concern: New untested mandate and/or management team
Marketing Considerations: The new fund is meaningful as it “tests” the recent Impax-PAX World marriage. Added resources and attention can be expected to be channeled into the fund’s marketing, and toward gaining distributor’s attention in the near-term.
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DEFINITION — ALERT RATINGS
Due Diligence (“DD”) Alert: Ranks each identified sustainable fund event or development according to a three-point “call to action” scale that ranges from Low to High, defined as follows:
LOW: A preliminary review and evaluation is recommended, but no on-going monitoring or manager meeting is needed.
MODERATE: Near-to-mid-term review and evaluation is recommended along with a manager meeting.
HIGH: Immediate manager contact and meeting are recommended, plus detailed review and evaluation – scheduled on-going more detailed monitoring and follow-up manager meeting(s) are advised.
Marketing Considerations: Ranks the level of required response/urgency for each identified sustainable fund’s product development, sales, promotional or other strategic marketing event or development. The ranking scale is 1 to 5, where a rank of 1 indicates the lowest level of urgency, requiring little or no competitive response, to a rank of 5 that indicates the highest level of urgency, requiring immediate competitive and/or marketing and sales force response.
