LONDON – 12th December, 2016 -- Acadian Asset Management, the $74bn quantitative equity investor, announces the launch of the Acadian Sustainable Emerging Markets ex Fossil Fuel UCITS Fund (“the Fund”). This marks a pioneering new direction in Responsible Investing, as the first such fund to focus on implementing this theme across emerging markets. As the first quantitative manager to sign the UN PRI and having dedicated ESG resources, Acadian has always seen Responsible Investing as an integral part of its investment process.
Anchored by a significant investment from a UK institutional investor advised by Cambridge Associates, the global investment firm, the Fund has been created to help meet growing investor demand for divestment within portfolios, while maintaining investment returns, and ensuring investors are not penalised for investing in a sustainable manner.
Using a combination of third-party data and its own proprietary methods, Acadian has developed a process to identify and exclude companies which own fossil fuel reserves. In addition to this, Acadian aims to apply screens to ensure that the aggregate carbon emissions applicable to the portfolio will be at least 25% lower than those of the benchmark index. This process extends across Acadian’s 13,000-strong database of companies in the Emerging Markets. It is the breadth and depth of this data which underpins Acadian’s belief that it can produce an effective carbon screen within an alpha-generative portfolio with robust risk controls. Acadian’s quantitative approach allows stock selection from across the range of Emerging Markets including the less efficiently priced small and mid-cap space, where Acadian believes that some of the best opportunities for alpha lie.
In its ongoing analysis of the ESG market, Cambridge Associates has found that ESG factors have helped investors achieve significant outperformance in emerging markets. In the three years since its launch, the MSCI Emerging Markets ESG Index has outperformed its parent index, the MSCI Emerging Markets Index, by a cumulative 12 per cent on a total return US dollar basis. More than 50 per cent of this outperformance was attributable to ESG factors alone. Cambridge Associates has also looked at older data from January 2007 up to the index’s launch in June 2013, and found that ESG ratings were a strong source of stock-specific outperformance during most of this earlier six and a half year period as well.
Kelly Young, Managing Director of Acadian Asset Management (UK) Ltd commented: “ESG considerations have decisively moved from the niche to the mainstream, and we have seen a significant growth in confidence within the broad European investment market given the quality of the data now available.
“Responsible investing is an integral part of our investment process and we have long believed that sustainable companies can generate stronger performance over time. Given the growing demand for investors to play their part as active corporate citizens, our aim is to continue developing investor solutions that cater for our clients’ varied ESG requirements, while maintaining scope for strong performance.”
Chris Varco, senior investment director for Mission-Related Investing at Cambridge Associates, said: “We are working with increasing numbers of investors who are looking to incorporate ESG factors in their portfolio. With issues such as the divestment from fossil fuels gaining traction, the Sustainable Emerging Markets ex Fossil Fuel UCITS Fund represents another option in emerging markets for investors considering the impact of climate change on their investments.”
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Notes to Editors
For Acadian Asset Management:
Henrietta Dehn / Georgia Brown, Prosek Partners
+44 (0)20 3440 5809
For Cambridge Associates:
Simon Targett, Sommerfield Communications
+44 (0) 207 060 6551
About Acadian Asset Management
Acadian Asset Management (UK) Ltd is a subsidiary of Acadian Asset Management LLC, the investment manager based in Boston Massachusetts, and is regulated by the Financial Conduct Authority. Acadian invests on behalf of institutional investors such as pension funds, endowments, governments and foundations, as well as other investors. The firm uses an innovative array of disciplined, quantitative investment techniques and analytical models for active stock selection as well as country, sector and currency valuation. Acadian’s strategies include managed volatility, emerging markets, global equity, small-cap, long/short, market neutral, and non-US equity strategies. For more information on Acadian, please visit www.acadian-asset.com.
About Cambridge Associates
Cambridge Associates is a global investment firm founded in 1973 that builds customised investment portfolios for institutional investors and private clients around the world. Working alongside its early clients, among them several leading universities, the firm pioneered the strategy of high equity orientation and broad diversification, which since the 1980s has been a primary driver of performance for these leading fiduciary investors. Cambridge Associates serves over 1,100 global investors – primarily foundations and endowments, pensions and family offices – and delivers a range of services, including outsourced investment (OCIO) solutions, traditional advisory services, and access to research and tools across global asset classes. Cambridge Associates has more than 1,300 employees – including over 150 research staff – serving its client base globally. The firm maintains offices in Arlington, VA; Boston; Dallas; Menlo Park and San Francisco, CA; Toronto, Canada; London; Singapore; Sydney; and Beijing. Cambridge Associates consists of five global investment consulting affiliates that are all under common ownership and control. For more information about Cambridge Associates, please visit www.cambridgeassociates.com.