We asked our asset manager and discretionary fund manager Affiliate Supporters from this year’s Social Investment Academy to tell us how their real-life investments into impactful companies generate both positive impact and a financial return. Here’s what they had to say…
With each of our sustainable investments we aim to generate both a positive social impact and a financial return. Insulet Corp is a good example. It is the producer of the ‘Omnipod’: a wireless, painless, waterproof insulin delivery system for diabetics. It has successfully removed many of the challenges of existing treatments, and its equity has risen over 85% YoY.
Alongside the broader integration of ESG across asset classes, M&G continues to build our Impact Investing capabilities through the development of client solutions. These include our Impact Financing fund, investing in private and illiquid debt, and a soon-to-be-launched Positive Impact strategy – this intends to broaden impact accessibility to the wider investing public by selecting sustainable and impactful businesses addressing major societal and environmental challenges.
MONTANARO ASSET MANAGEMENT
Chr. Hansen is a Danish producer of enzymes and probiotics helping to drive better farming, good health, and less food waste. Their enzymes are increasing crop yield across 25m hectares of farmland. Their 30,000 strains of ‘good bacteria’ make food healthier and are consumed by over 1bn people every day. Other bacteria prolongs food shelf life, saving 230,000 tons of waste/year. 81% of Chr. Hansen’s revenue contributes to the UN SDGs. Montanaro purchased the company at IPO and the shares have returned over 700%.
PICTET ASSET MANAGEMENT
Pictet’s Global Environmental Opportunities Fund is invested in UK-based chemicals manufacturer and distributor Croda, which has been trading at a lower earnings multiple than peers, offering strong pricing power and achieved a 37% incremental return on invested capital between 2006 and 2016. Further, the company uses non-oil based raw materials (i.e. not fossil based) in the creation of the majority of their products.
RATHBONE INVESTMENT MANAGEMENT
Ecolab is a US-listed industrial business. The company provides cleaning technology for a number of commercial environments (including hotels and offices). It is the global leader in its field but continues to grow market share by offering more sustainable solutions for its customers. The business grows faster than GDP, is highly profitable and management have a superb track record.
The Resonance Bristol SITR Fund invests into high impact social enterprises, all of which are helping to dismantle poverty in the region. The funds first investment – South Bristol Sports Centre enables young people from the most deprived areas engage in sports, helping to improve health, confidence and provide training opportunities. In addition to impact, the fund is providing attractive returns to investors.
SARASIN & PARTNERS
Belgian materials technology company Umicore benefits from tighter vehicle emission standards on catalytic converters, increased recycling of metals, and the acceleration of adoption of high-performance batteries for both electric vehicles as well as electric grid storage for renewable power generation. In all three areas it is the leader in markets that have high barriers to entry.
WHEB ASSET MANAGEMENT
Orpea S.A. predominantly operates nursing homes for the elderly in Europe. Orpea makes a positive impact by providing high-quality elderly care. It helps to meet the growing demand for more care homes due to global ageing populations. Its strong focus on quality and risk management and its role as an industry consolidator result in stable and profitable organic growth.
The EQ Positive Impact Portfolios invest in funds which can show that they are supporting companies taking steps to achieve a social or environmental impact as well as a financial return. Each investor has their own portfolio which is invested in a well-diversified mix of 15-20 funds and actively managed by EQ.
KING & SHAXSON ETHICAL INVESTING
Focused on ethical investing since 2002, we have a transparent investment process, marrying a pragmatic approach to risk and return whilst also focusing on the impact our investments have. Our tailored service allows client’s values to be reflected in their portfolio, leading to investments in solutions to social and environmental challenges, from large cap companies to microfinance bonds.
PortfolioMetrix’s Ethical Emphasis approach is our range of risk-controlled model portfolios focusing on both financial returns and impact. Since launch in early 2017 to end August, a period where cash earned 0.8% and the FTSE 100 was up 11.6% including dividends, they have returned between 3.3% and 17.9% net of fees whilst funding companies lowering greenhouse gas emissions (clean energy investment, energy efficiency), reducing waste (recycling, more biodegradable products), improving water usage and improving health and education.
Thank you to our Affiliate Supporters for their help in delivering this year’s event: –