Fund managers must have a clearly-defined environment, social and governance (ESG) policy to attract institutional investors, according to Mint Asset Management chief, Rebecca Thomas.
Thomas said wholesale investors increasingly see comprehensive ESG policies as a must-have fund management item rather than simply a specialised portfolio ‘ethical’ option.
“Globally, fund manager responsible investment policies are now viewed as a hygiene factor by institutional investors,” she said, to be tested against international ESG benchmarks.
Last week the $750 million plus Mint earned top marks in its inaugural United Nations Principles for Responsible Investment (PRI) report card. The PRI scored Mint ‘A+’ for its overall approach to responsible investment in a 35-page report covering multiple asset classes and assessment factors.
Thomas said the PRI process ranks managers in the same size bracket (Mint falls into the US$0.1 to 0.99 billion bracket) across asset classes and geographies.
Mint scored 29 out of a possible 30 across 10 strategy and governance indicators, the PRI report shows.
“When we set up Mint [in 2007] we designed it to meet international best-of-breed fund management benchmarks,” she said. “The PRI rating is a good tick for us – it’s an independent global endorsement of our process.”
The result would likely have more resonance for institutional investors than in the retail market, Thomas said.
“There is a growing awareness of ESG among NZ retail investors but it hasn’t reached a groundswell yet,” she said. “But in the wholesale market an ESG process is essential for fund manager credibility.”
The PRI rating coincided with the launch of a new Mint wholesale NZ equities socially responsible investment (SRI) fund.
Thomas said the new fund, which has a seed client, also added another string to the Mint bow.
“We didn’t have a NZ-only equity fund in our stable – our other funds are Australasian,” she said. “But there has been client demand for a pure NZ shares product.”