Overview of responsible investment
Investec Asset Management has developed a Responsible Investment capability which currently has two key strategies:
- Investec TDi Balanced Strategy
- Investec Responsible Investment (RI) Equity Strategy
Seeking to understand these themes and integrate ESG insights into traditional investment.
The Investment Philosophy
We have a fundamental belief in the exploitable advantage of financially and economically relevant environmental, social and/or governance information.
We also believe that long-term absolute returns and market relative outperformance is a function of having an exploitable information advantage, avoiding overpaying for assets at time of purchase and adopting an ownership rather than trading mindset.
Exploitable information advantage:
The market has tended to ignore or failed to recognise the economic importance of key environmental, social or governance (ESG) information available in the markets.
The price you pay:
The price we pay today will deeply influence our long-term returns. As such we focused on finding businesses where the market has ignored or misunderstood the extent of the ESG information relevant to that particular company or sector in terms of risk and opportunities.
We seek to adopt a longer-term ownership approach than traditional market participants, adopting an engagement methodology to further endorse our ownership approach.
The remainder of the portfolio is invested in a diversified portfolio of interest-bearing securities including cash, bonds, inflation-linked bonds, preference stocks and listed property.
Investec TDi Balanced
Investec TDi Balanced is a balanced multi-asset strategy which aims to benefit from an understanding of the risks and opportunities unique to the environmental, social and governance (ESG) dynamics in the market.
The Strategy offers the prospect of attractive absolute returns with low to moderate volatility and an appealing socially responsible character over the long term.
The Strategy targets returns well in excess of inflation, measured over three to five year periods. Asset allocation is flexible but seeks a sensible exposure to equity and fixed income assets, including listed equities, debt, cash and unlisted assets such as infrastructure and private equity.
Investec Responsible Investments Equity
Malcolm Gray is a Portfolio Manager at Investec Asset Management accountable for our Responsible Investment (RI) portfolios since 2005.