Opalesque Industry Update - Auriel Capital Limited (‘Auriel’), a European Equity Long/Short manager, has partnered with Inflection Point Capital Management (IPCM), an asset management boutique focused on sustainability solutions, to create a new joint venture, Inflection Point Partners LLP (IPP). The new joint venture delivers an absolute return overlay strategy for European equities which integrates traditional financial research together with sustainability analysis.|
IPCM was formed by Dr Matthew Kiernan, who has over 20 years experience in sustainability research and investing. IPCM’s predecessor firm Innovest Strategic Value Advisors was the #1 rated investment research firm in the world in the sustainability space and sub-advised on $1.5bn in innovative, sustainability-enhanced strategies. Prior to founding Innovest, Dr. Kiernan had served as Director of the World Business Council for Sustainable Development in Geneva.
Larry Abele, chief executive for Auriel Capital, says: “Research into intangible valuation is often overlooked or viewed as too slow to be material. We have found that sector specific research into the material issues facing Europe’s major corporations adds significant value. We are excited to be working with IPCM to enhance our fund with new unique sources of alpha.”
Matthew Kiernan, chief executive of ICPM, says: “Partnering with Auriel allows us to take our insights from over twenty years of research into sustainability and turn those insights into an institutional quality solution for investors. IPP’s initial offering is a direct response to the growing demand from the owners of the $30 trillion in assets who have signed up to the UN’s groundbreaking Principles for Responsible Investment.”
The Fund initially launched in June 2007 as the Auriel European Equity Fund has been renamed the Sustainable Absolute Return Fund. The strategy utilises a systematic approach trading the most liquid pan-European equities in a long/short, beta and sector neutral portfolio. The Fund will provide a solution for investors who hold broadly diversified portfolios of European shares where ESG issues are not being integrated into portfolio decision making. The fund aims to generate 3-6% net return over cash with 6-8% volatility, while maintaining low correlation to both global equities and major asset class indices.
The strategy combines the rigour of a world-class risk control and portfolio construction with industry-leading research focused on forward-looking “non-traditional” risk and return drivers, with factors such as environmental sustainability, human capital, organisational capital, adaptability and responsiveness and capacity for innovation.
Andrew White, Head of Sustainability Research for IPP, said: “Our process integrates - from the very outset – both traditional financial and sustainability research and analysis. We look carefully at environmental and social considerations, bringing an entirely new framework to the sustainability arena looking at factors such as corporate agility, culture, board skills, innovation capabilities, and exposure to emerging global megatrends.”
Inflection Point Partners LLP is a joint venture between Auriel Capital Limited and Inflection Point Capital Management bringing together more than 20 years of industry-leading sustainability research with institutional quality portfolio construction and risk management. Inflection Point Partners LLP is authorised and regulated by the Financial Services Authority.
Auriel Capital Limited and its predecessor firm have managed in excess of $2bn for institutional clients since being founded in 2004. Chief executive Larry Abele has extensive experience managing absolute return portfolios including alpha overlays involving assets and liabilities for foreign exchange, asset allocation and stock selection. Auriel Capital is authorised and regulated by the Jersey Financial Services Commission. www.aurielcapital.com
Dr Matthew Kiernan is founder and CEO of Inflection Point Capital Management Ltd and recently published ‘Investing in a Sustainable World’. Dr Kiernan also founded of the #1 rated sustainability research house, Innovest Strategic Value Advisors. Innovest provided environmental, social, and governance ratings and views to managers and asset owners, and helped design and manage a number of innovative, sustainability-enhanced investment strategies before being purchased by Risk Metrics in 2009. www.inflectionpointcm.com