This Wednesday 23rd of February here at RankiaPro Europe we hosted our first Conference Call of 2022. It was quite interesting to hear about the strategies and insights of our three panellists while discussing the current situation of the markets, Central Banks, inflation and interest rates.
To discuss the topic of How to integrate ESG into portfolios, we had the pleasure of hosting three Fund selectors whose expertise gave us an overview of the funds and investment market around this interesting topic, how they are integrating ESG into their strategies at the moment, and what they expect in the future.
Pierre Bermond, Asset Allocation and Fund Selection Specialist at EOS Allocations, Stephane Berthet, Founding Partner at Hyphen Alternative Advisors, and Paris Jordan, Multi-Asset Analyst at Waverton Investment Management on a broad range of factors that are likely to shape the investment landscape during these times.
“Our score, 30% is based on the asset manager, so what is the seniority in ESG. We have seen companies that have done ESG just for the last two years, so they are lacking experience. We are also looking at ressources. We audited an asset manager with like almost 100 billion AUM and he has just one ESG Analyst. They justify saying that they don’t have money, that they cannot afford more. So don’t do ESG if you cannot pay more than one Analyst when you have 100 billion AUM, don’t do it.”
“First we are doing Asset allocation, then with our Ethyk Score we are scoring the authenticity ESG process and then we are building the portfolio. We are investing within ESG with Funds having a good ethyk score and then, we are doing asset allocation.”
“My job is asset allocation so I don’t want a portfolio bias towards rules. We need to have a balance between rules and value”
Pierre Bermond is a graduate of the Ecole Supérieure de Commerce de Bordeaux, holds an MBA in Financial Analysis and Investment Banking (Wake Forest USA) and a master’s degree in geopolitics from the Ecole Normale Supérieure (Ulm)/Sorbonne Paris. After beginning his career in Forex at Crédit Lyonnais and equity derivatives at Société Générale, he worked as an asset allocation consultant for institutional investors and as a portfolio manager. Pierre is the founder and executive director of EOS Allocations, a company dedicated to asset allocation and fund selection. EOS Allocations is the leading company in asset allocation for French IFAs.
“Launching ESG-themes products has been a much-needed area of growth in recent years for asset managers”
“Branding or rebranding funds as green or ethical allow them to tap into a huge wave of investor demand. Investors globally poured $142.5b into sustainable funds in the fourth quarter of last year, 12% up on the previous quarter, according to financial data provider Morningstar. That took total worlwide sustainable assets to $2.7tn across more than 5,900 funds, three-quarters of wich were in Europe.”
“Many asset managers are branding, rebranding, restructuring their company funds by appointing ESG specialists, implementing ESG policies leveraging on third-party group and/or own policies, setting up dedicated committee to monitor those policies and their portfolios, implementing risk management procedures…”
“Being able to identify the good ESG manager is the real challende for fund selectors and investors”
Stephane is the former head of the USD2.6bn Morgan Stanley UCITS Platform where he was in charge of the sourcing and onboarding (including structuring solutions) of new managers, the distribution of the funds on the platform and the day to day management of the platform. He was also in charge of the development of the managed account platform, ALPHAS Platform, and the various solutions offered to institutional investors.
Prior to this position, Stephane held roles at BNP Paribas where he covered mainly UK investors for Fund Derivatives business and Innocap managed account platform, Societe Generale where he was head of European Fund Derivatives Structuring, focused on leverage transactions for hedge fund portfolios and helped launch Lyxor SGR in Italy.
“There are so many different approaches and ESG is so subjective to each client type. What that consequently means is that it can become a bit complicated, and it results in something like greenwashing, in confusion about what clasifies ESG and what does not”
“There are three pillars to our Responsible Multi-Asset Investment Philosophy. Intentionality, what an investment is tryting to achieve, Incorporation, how it is going to be achieved and Impact, what impact it has achieved.”
Paris joined Waverton in 2021 as a senior multi-asset analyst, specialising in fund selection and model management. Paris has held roles at Sanlam and Fidelity. She has a proven track record across a variety of asset classes and a notable specialism in ethical and sustainable investing.
She has a BA Hons degree in Politics, Philosophy and Economics, is a CFA Charterholder and holds the CFA ESG Certificate.