Scalable solution highlights ESG integration in fixed income strategies
10 February 2017 (London) - BlueBay Asset Management LLP (“BlueBay”), a leading global fixed income manager, is expanding its environmental, social and governance (ESG) fixed income offering.
Responding to client demand for greater incorporation of ESG into fixed income investment strategies, BlueBay has established a more dedicated ESG strategy available for clients.
BlueBay has been working with global investment consultants Mercer and PKH, a leading Nordic pension fund, to establish an investment strategy focused on investment returns in the high yield asset class whilst including ESG analysis, to add to its existing approach of ESG investment risk management, which applies across all managed assets.
The ESG investment strategies applied to the new flagship strategy have been developed by BlueBay, incorporating the ESG investment policy of the (Norwegian) Government Pension Fund Global managed by Norges Bank. These strategies encompass product based screening (negative screening covering controversial weapons, tobacco and coal), conduct based screening (norm based drawing on the UN Global Compact), integration and engagement.
Talking about the growing trend of ESG in fixed income investing, Raphael Robelin, Chief Investment Officer at BlueBay, said, “BlueBay was founded in 2001 in response to new opportunities in the debt market. Our strength is in our pro-activeness in anticipating the needs of our clients and market trends. Fifteen years on, we believe we are facing the start of another important market development – the application of ESG investment strategies to the debt asset class.”
Raphael went on to say that the launch of this ESG offering illustrates BlueBay’s ongoing commitment, as a specialist fixed income manager, to incorporating ESG and demonstrate innovative and proven new approaches to investing across the asset class.
Andreas Thorsen from global investment consultant Mercer said, “ESG challenges such as climate change and income inequality are becoming increasingly important for many institutional investors. These investors understand that common misconceptions around ESG investing, predominantly focusing on negative screening, resulting in limited investment returns, are outdated and know that ESG integration can perform a crucial fiduciary duty. Working with BlueBay to develop a client orientated ESG fixed income solution is a clear example of the trend we are observing of the application of ESG to asset classes beyond equities.”
Mariann Bendriss, CFO from PKH, said, “As asset owners with long term liabilities, it is important we ensure our investments also take a long term perspective. We believe the incorporation of ESG into investing is important and relevant as such factors can have economic and investment impacts. Viewed in this way, ESG is good long-term risk management. In the process, we can also play a role in contributing to sustainable development, something which is also of interest to our beneficiaries.”
The strategy has been established in a Luxemburg UCITs structure, called the BlueBay Global High Yield ESG Bond Fund, a sister fund to the existing BlueBay Global High Yield Bond Fund.
Notes to Editors
About BlueBay Asset Management and ESG investment risk management
Since 2013, BlueBay has operated an ESG investment risk management framework, applicable to all managed assets. ESG investment strategies employed as standard across existing strategies are integration and engagement, with negative screening based on corporate credit Controversial Weapons involvement for pooled funds.
BlueBay is a signatory of the UN-supported Principles for Responsible Investment (PRI). A recent assessment by them [August 2016] of BlueBay’s internal ESG investment efforts concluded the approach as progressive in comparison to the median of its peer group. Further information on BlueBay’s ESG investment risk management practices is available on BlueBay’s website.
BlueBay is a global specialist fixed income manager. Headquartered in London with a strong European presence, we invest over US$50 billion (as at 31 December 2016) for institutional investors and financial institutions across the fixed income investment spectrum on a global scale, from active benchmark aware portfolios to alternative strategies and private debt. We employ an active management style focused on exploiting all factors of return. Capital preservation is at the core of our process. Our strategy focuses on superior client service; maintaining and improving a robust investment platform alongside effective risk management.
BlueBay has offices in the UK, Switzerland, Germany, Ireland, Luxembourg, Stamford (US) and Japan. BlueBay Asset Management LLP is wholly-owned by Royal Bank of Canada and part of RBC Global Asset Management. BlueBay Asset Management LLP is authorised and regulated by the Financial Conduct Authority and is a registered investment adviser with the US SEC.
Mercer is a global consulting leader in health, wealth and career. Within wealth Mercer provides objective investment advice and services. They offer customized guidance at each stage of the investment decision and risk management process.
PKH is a pension fund in Norway with the hospitals and employees in the Oslo region as customers and members. The pension fund has in total 22 billion NOK of assets under management. PKH has six employees and the business model is to use larger external partners to deliver on investment advisory and reporting, actuarial estimates, accounting and pensions services to 67.000 members.
BlueBay Asset Management
Jayne Fieldhouse: 020 7167 4013