We apply an innovative approach with respect to the internally managed equity and credit portfolios. The assets are chosen selective. In this selective approach we fully let go of the benchmark. The portfolios only hold about 60 to 70 stocks and the same number of credit assets. This intensifies the approach in which the assets can be evaluated upon selection and closely monitored afterwards. SRI criteria are integrated in both these processes. During selection extensive research is done (both via a research provider as well as in-house) on both the financial as well as the SRI side of the investment. Also, dialogue with the company is started. SRI can be a no-go if material issues with a company are found. Even if a specific company is not formally on our exclusion list, it can be excluded from these internally managed portfolios if we do not feel sufficiently comfortable with its ESG policy. After selection, careful monitoring continues and regular dialogue with the company takes place. We engage in dialogue with all of the companies in our portfolio at least once a year, if issues arise more often. In this dialogue, SRI issues and/or improvements are considered. Due to the limited amount of assets in our portfolio's, we often have a rather big stake in a company. This gives the fund ease of access to top management. We have regularly noticed that companies have a true interest in our concerns and/or ideas.
The approach gives us a much better grip on the SRI side of investing than when simply placing all of our money in a benchmark, where you can exert influence only to a certain extent. With our approach we have won the FD/IPN awards for best long-term investment in 2013. Other pension funds and investment managers regularly visit us to learn more about this approach.
Additionally, the Spoorwegpensioenfonds has been involved in the set-up of an sustainable agricultural fund. The Annona fund invests in Africa and Latin America in SMEs. http://www.annona.nl/