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(February-2002) Tower poised to launch SRI
Tower Asset Management is poised to launch a global socially responsible investment (SRI) wholesale fund which will be managed by Storebrand Investments, Norway’s largest financial services group.
Storebrand, which has over five years experience in managing SRI portfolios and which has over $7 billion in SRI funds under management, was chosen after an in-depth tender conducted by Tower’s New Zealand parent, which included site visits and a due diligence examination by KPMG in London.
Tower senior product manager Jeremy Oorloff says the new fund, the Tower Global Responsibility Investment Option, has been seeded at $20 million.
Tower Employee Benefit Services manager of corporate markets Stuart Rowe says Storebrand “is probably ahead of its time compared to other SRI managers… and represents the type of manager that will evolve going forward”.
Storebrand, which has a market capitalisation of $30 billion, uses the Triple Return investment process, which quantitatively measures the financial, environmental and social returns of the companies it invests in.
The manager applies a best of sector approach, where only companies that are in the top 30 per cent for their sector on both social and environmental criteria, have a chance of being selected. But companies also have to be financially attractive.
Storebrand uses the MSCI World index as its benchmark and aims to beat it over rolling three-year periods. The portfolio consists of about 70 stocks and is constructed according to a “tracker plus active” approach.
On the domestic front, Tower also runs the Australian Ethical Fund, which has about $68 million under management and has been operating since 1986. This fund makes its investment choices using negative screening and according to Rowe, Tower is currently examining how best to take this fund forward.
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