InvestmentsJun 23 2022

Quilter Investors seeds River & Mercantile sustainable funds

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Quilter Investors seeds River & Mercantile sustainable funds
River & Mercantile launches sustainable equity funds. [Photo by Andrew Neel via Pexels]

Quilter Investors has backed a brace of sustainable equity funds, which will be run by River & Mercantile. 

The R&M European Change for Better Fund, managed by James Sym, and the R&M Global Sustainable Opportunities Fund, to be run by William Lough, will comply with articles 9 and 8 of the European Union's Sustainable Finance Disclosures Regulation. 

Multi-asset investment provider, Quilter Investors, has committed seed capital, via its Cirilium Active portfolios.

We want 2022 to be remembered as the year that the asset management industry started doing ESG properly.James Sym, River & Mercantile

The R&M European Change for Better Fund launched on June 21, and the R&M Global Sustainable Opportunities Fund is expected to launch early July.

Both strategies will follow R&M’s Sustainable-PVT investment philosophy, which incorporates sustainability into the team’s long-established process, looking at: potential, valuation and timing.

River and Mercantile's head of equities Sym, said: “We want 2022 to be remembered as the year that the asset management industry started doing ESG properly."

Sym said the team would be investing in companies which expect to make a big improvement in their carbon footprint, as well as those companies which enable this improvement for others.

He added: "This fits well with our contrarian and valuation-orientated mindset. We are looking to buy tomorrow’s ESG stars at yesterday’s valuations.”

Paul Craig, portfolio manager of Quilter Investors’ Cirilium Active range, said: “These new funds represent a great diversification opportunity for our clients.

"We are impressed by R&M’s differentiated approach to sustainable investing, which avoids the typical ESG ‘darlings’, and consequently offers a strong alpha-generating opportunity.

"We have been a supporter of R&M for a number of years and are pleased to extend this successful relationship.”

It is a very competitive market for Article 9 funds.Darius McDermott, Chelsea Financial Services

Lough added: “We believe these funds will make a real-world difference, offer attractive diversification benefits for investors and tap into return drivers which have a long shelf life."

Investment adviser Darius McDermott, founder of FundCalibre and managing director of Chelsea Financial Services, said the range looked interesting, but warned there was a lot of competition out there.

He told FTAdviser: "It is interesting to see two new funds with some seed assets from Quilter. While there is a clear trend to ESG there are not many European and Global funds with a value tilt.

"One of the things they are doing differently is investing in some stocks with poor carbon footprint today but on a journey to substantial improvements.

"I like R&M and they have a strong process (Sustainable PVT) at the centre of their funds. I say they have a good chance of success but it is a very competitive market for Article 9 funds."

simoney.kyriakou@ft.com