Search the results Dexia Asset Management has carved out a successful niche as a leader in socially responsible investment. It tops the poll for best provider of ethical investments globally and in western Europe, as well as in Belgium and Luxembourg.
Although interest in socially responsible investments has traditionally come mainly from retail investors, there is growing interest from private bank and institutional clients, as the market as a whole is growing strongly.
Figures from FERI Fund Market Information show that although the global fund management industry as a whole grew by 16% from the beginning of 2004 to the end of the first quarter of 2005, the socially responsible investments segment grew by 35%. Dexia has posted even stronger growth. Its socially responsible investments business grew 46% over the same period. It now manages more than A10 billion across a variety of socially responsible funds, including tailored mandates.
Dexia is having more success in winning mandates from private bank clients than most because it has a wider range of funds spanning regions and asset classes. Unlike most socially responsible investment managers, Dexia offers fixed-income investment, as well as equity funds and mixed funds. It also offers US and global funds, as well as investments in Europe. This relatively wide range, which few other managers match, makes Dexia’s socially responsible investments more suitable for private bank clients with large portfolios than those from many other providers.
One growing sub-segment of socially responsible investment that is attracting increased attention is sustainable investments. These apply extra-financial investment criteria to companies to screen the way in which they manage their relationships with the environment and stakeholders. Stakeholders go beyond shareholders to include employees, clients, suppliers and society as a whole. Extra-financial issues – also known as intangibles, corporate risks and long-term value drivers – are best described as fundamentals that might adversely affect companies’ financial performance or reputation in a material way yet are generally not part of traditional fundamental analysis.
A growing number of mainstream fund managers are becoming interested in such extra-financial investment criteria. Last year a group of fund managers and pension funds – including BNP Paribas Asset Management; Allianz Global Investors company RCM; the Universities Superannuation Fund, one of the largest pension funds in the UK; and PGGM, the Dutch health service pension fund – started the Enhanced Analytics Initiative to encourage brokers to produce more extra financial research. The EAI group has pledged to allocate a minimum of 5% of their commission spend on brokers that excel in extra-financial analysis.
Socially responsible investing is as reliant for its success on good performance as are other investment styles. “If you ask clients if they are interested in socially responsible investments, they all say ‘Yes’, but only if the performance is the same,” says Wim Vermier, global head of equities and sustainable management at Dexia Asset Management. “Very few – fewer than 5% – are willing to sacrifice any performance for sustainability.”
