The investment division of one of the world’s largest international family offices, is to launch a range of sustainable investment funds.
Stonehage Fleming Investment Management (SFIM), which currently manages £7.4 bn in mainstream multi-asset funds, is to launch a series of Global Sustainable Investment Portfolios.
These portfolios will utilise the group’s existing multi-asset investment process, with the same investment and performance objectives, but socially responsible objectives will also be applied.
Mona Shah, director at Stonehage Fleming Investment Management, said the group strongly believed values-based investing does not need to compromise returns.
“By launching our Global Sustainable Investment Portfolios, we are helping clients to achieve their maximum impact potential in line with their values,” she said. “The managers we select will pass a high threshold of qualitative and quantitative analysis, of both their investment processes and their ESG credentials.”
Stonehage Fleming constructs portfolios by selecting funds from across the industry, blending manager skills to meet a variety of risk-return objectives. The range will initially focus on equities, fixed income, alternatives and cash. The headline asset allocation and the risk-adjusted targets will be very similar to the mainstream portfolios.
However, the overlap in funds between GSIP and SFIM’s existing portfolios is very low, the group said, as the fund managers selected will be required to overcome different and demanding hurdles, such as their approach to governance and impact methodologies.
Graham Wainer, chief executive officer and head of investments at SFIM, said the group was “excited” by the opportunities within fixed income, which has been largely overlooked by ESG investors.
“Bond investors have longer time horizons than their equity peers, and more nuanced relationships with management teams and, critically, with governments,” said Wainer. “This will be an important asset class for GSIP.”
Guy Hudson, head of group marketing at Stonehage Fleming, cited proprietary research showing 75% of investors wanted their values to be reflected in their portfolios but only 21% were actively taking this approach.
Hudson said the group saw socially responsible investing as a “vital expression of our clients’ ‘social capital’, or the way they engage with and contribute to wider society”.