Auckland-based boutique Pathfinder Asset Management has secured an almost $50 million mandate from Ngāi Tahu for its just-launched socially responsible investment (SRI) wholesale global equities fund.
John Berry said the new Responsible Investment Fund has taken the SRI model to “the next level” in the NZ market with a sophisticated screening process backed up by global specialist research firm Sustainalytics.
Berry said as well as the typical exclusions commonly demanded by NZ investors – for example, cluster munitions manufacturers – the Pathfinder global shares product features two further levels of SRI analysis.
“Firstly, there’s a negative screen based on a company’s ‘controversy rating’ – where Sustainalytics measures factors such as press reports on poor corporate behaviour,” he said. “And there’s also a positive screen looking at corporate ESG [environmental, social and governance] Sustainalytics’ rating.”
Overall, the Responsible Investment Fund would hold about 250 stocks cherry-picked from global mid-to-large caps according to Pathfinder’s macro views on different geographical regions and sectors.
In a statement, Mike Sang, chief executive of the $1.4 billion Ngāi Tahu Holdings, said: “Pathfinder has developed a solution for managing our international equities exposure in a way that is consistent with our values as an organisation. We look forward to growing our relationship with Pathfinder as our exposure to global listed markets increases over time.”
Berry said other wholesale investors had expressed interest in the new SRI fund.
“We would also consider launching a retail version of the Responsible fund if there was enough demand,” he said.
According to Berry, Pathfinder aimed to be at the forefront of SRI in NZ, with the new international shares SRI fund joining the Global Water Fund in the category.
In a release announcing the Ngāi Tahu deal, he said the next wave of the responsible investment process “needs to go beyond the accepted practice of simply screening out ‘bad’ revenues”.
“It also needs to focus investment into companies that score highly on environmental, social and governance criteria,” Berry said.
The Responsible fund is Pathfinder’s fifth offering since founded in 2009 by Berry and co-director, Paul Brownsey.