New Brunel multi-manager fund targets sustainable equities
Brunel Pension Partnership Limited (Brunel) has launched a new Sustainable Equities Fund.
Brunel is one of eight pooled Local Government Pension Scheme funds in the UK, and the sub-fund will manage a mandate of approximately GBP1.2 billion.
Clients asked Brunel to create a listed equity portfolio in which ESG considerations are at the forefront of the investment process, and where the managers positively pursue companies that will provide a benefit to society.
“The Sustainable Equities Fund gives our clients access to both the equity risk and sustainability focus they requested,” says David Cox, Head of Listed Markets at Brunel. “The three managers we appointed share a broad investing style and a prioritisation of sustainability, yet their approaches are also different enough to provide clients with the diversification they were looking for.”
Brunel received 70 expressions of interest, from which 15 managers were invited to tender. Brunel then shortlisted 8 managers for investment due diligence meetings, ultimately selecting three managers to form a blended solution.
“We were delighted to find managers who share our understanding of sustainability, embedding it deep into their culture and investment processes,” says David Jenkins, Portfolio Manager for the Sustainable Equities Fund. “This portfolio therefore meets our aspiration to go beyond traditional Responsible Investing and ensure that the managers are engaged with the companies and are investing in them for positive reasons, not simply focusing on negative exclusions.”
The portfolio opened with a significant underweight to GICS energy sector and an aggregate carbon intensity that is significantly lower than the MSCI All Country World Index, which it uses as a benchmark.
The selected managers integrate Environmental, Social, Governance (ESG) metrics throughout their whole investment process including their decision making, stewardship, policies and strategies. This portfolio goes beyond our current portfolios which manage ESG risks, and managers actively seek exposure to companies providing solutions to sustainability, whilst also targeting a financial return.
Sean Johns, Funds Investment Officer, Cornwall, a client, says: “The Cornwall Pension Fund aspires to be at the forefront of responsible investment best practice, and investing in companies and assets that contribute to the long-term sustainable success of the global economy and society is key to this. This cutting-edge product offers us a new way of meeting this aspiration.”
Omar Cordes, CEO & Co-Founder, Ownership Capital, says: “Ownership Capital is delighted to offer its engaged sustainable equity strategy to Brunel, a global leader in responsible investing. We look forward to partnering with Brunel to deliver stronger long-term investment returns at lower risk for clients by catalysing progress in corporate sustainability through active engagement.”
Habib Subjally, Head of Global Equity, RBC Global Asset Management (UK), says: "Brunel Pension Partnership has a deep commitment to Responsible Investing and we consider them to be thought leaders and innovators in this area. We are delighted, therefore, that, following a rigorous selection process, we have been appointed as one of the managers of the Sustainable Equities Fund.
"We look forward to partnering with Brunel to generate strong and sustainable investment performance, whilst simultaneously having a positive impact on the companies in which we invest for the benefit of society as a whole."
Nils Bolmstrand, CEO, Nordea Asset Management, says: "From one sustainable investment leader to another, we commend Brunel for its vision, leadership and innovation in Sustainable Investing. We are delighted, following a rigorous and engaging due diligence selection process, to have been appointed by the Brunel Pension Partnership. Nordea has been at the forefront of investing in companies that are changing the world for the better and transitioning to a more sustainable society. We are at a crucial period for a global response to climate and environmental challenges, and we look forward to working with Brunel in pursuing a more sustainable world."