Sustainable portfolio management
A focus on risk-adjusted returns, through a portfolio that is helping to build a better world
How you allocate your capital is one of the most powerful tools for addressing the sustainability challenges of our planet. That’s why we believe our role as custodians of your capital is extremely important.
There are many reasons why you may want to invest sustainably. It could be to align your investments with your organisational beliefs or you’re aware of the impact your capital can have in the world. Perhaps you’re thinking about intergenerational wealth or you recognise that sustainable investments should lead to relative outperformance over the long term.
Whatever you’re reasoning may be, you’re not alone: the 2020 Investing for Global Impact: A Power for Good report shows that around one in six respondents now consider impact investing to be the primary approach to their portfolio, and half are active with multiple impact investments across asset classes or causes.
We manage sustainable portfolios for a broad range of clients, ranging in size from £5m to £500m. Our clients include large institutions, sovereign wealth funds, charities and not-for-profits, family offices and private clients.
Given their global diversification and non-thematic, quality investment style, our sustainable portfolios are widely used as a core investment allocation.
Investment goals often vary, from long-term endowment funds to draw down savings pots. However the principle objective remains consistent: to maximise risk-adjusted return through a portfolio of businesses that are helping to improve global sustainability.
A strategy focused on quality
We invest in very high quality businesses with conviction, for the long term – allowing our investments to compound.
Our sustainable portfolios are importantly not thematic, as we believe top-down investing often leads to unwelcome biases within a portfolio, and a reduced opportunity set. Instead we’re active investors, identifying the best companies from across the globe and assess their sustainability credentials using our proprietary three-stage assessment process.
We also use a bottom-up approach. This means we focus on the fundamental qualities of individual companies, analysing their idiosyncratic circumstances and assessing their sustainability credentials using our proprietary three-stage assessment process. As long term investors, we do not try to time the market. We believe an active, bottom-up approach gives our clients the best chance of maximising risk-adjusted return over the long term.
Our sustainable portfolios are diversified across global supply chains and asset classes, meaning they can be used as a core investment allocation. As active, bottom-up investors, we have good access to the management teams of the companies we invest in. We use this to proactively engage with management, pushing for continuous improvement.
Sustainability is a key driver of financial returns
Maximising risk-adjusted return will always be our main objective - we look to do this through a portfolio of businesses that are improving global sustainability.
Our investment philosophy has allowed our sustainable portfolios to achieve top quartile performance when compared to our UK peer group since launching our sustainable investment offering.
Barclays Private Bank vs peer performance
Source: Asset Risk Consultants and Barclays Private Bank (30 September 2020).
(1) The strategy performance is blended using modelled performance data from Bloomberg PORT from inception to June 2019, then a composite of UK-booked portfolios thereafter. Strategy returns are net of transaction fees, third party fees, brokerage and custody costs, and a 0.75% annual management fee. Past performance is not a reliable guide to future performance.
(2) Asset Risk Consultants (ARC) GBP Balanced Asset Private Client Index (PCI).
Cutting carbon-intensity from your portfolio
Climate change poses one of the most significant risks we face as a planet. That is why our sustainable portfolios will not invest in any fossil fuel companies – ever!
The value of the companies we invest in often comes from their intellectual property, rather than in their ability to manufacture at volume. This focus on knowledge-based businesses provides high levels of return on capital. Their carbon intensity is also far lower than the wider market.
As part of our sustainability due diligence, we assess the resource intensity of our invested companies, looking for those businesses which are best-in-class.
The global pandemic, social uprisings, and the climate change emergency have brought the role of private wealth and responsibility into sharp focus. With the adoption of impact investing accelerating in 2020, investors have been choosing to use their wealth to achieve positive outcomes for all. In this report, a quarter of all global private wealth holders surveyed expect to move to more than 50 per cent invested for impact within five years.
Your sustainable portfolio management team
Alastair Randall, Head of Investment Management
Maya Tabaqchali, Sustainable Portfolio Manager
Naheeda Rashid Chowdhury, Head of Responsible Investing
Damian Payiatakis, Head of Impact Investing
Industry awards and commendations
It all begins with a conversation
Discuss your needs with us and find out how we can help you achieve your goals. We serve clients who can establish an investment portfolio of at least £5m (or local currency equivalent) with us.
Sustainable Portfolio Management 2020 report
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Past performance is not an indication of future performance. The value of investments, and any income can fall, as well as rise, so you could get back less than you invested. Neither capital nor income is guaranteed.
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