BNP Paribas Asset Management (BNPP AM) uses the advisory services of FundQuest Advisor (FQA) for the selection, appointment and monitoring of managers and funds that are external to the BNP Paribas Group. FQA is a 100%-owned BNPP AM subsidiary and is the fund selection arm of the group, with a focus on long-only investment funds.
FQA has been a pioneer in ESG fund research, having set up a proprietary ESG fund rating methodology in 2014. FundQuest Advisor incorporates ESG and SRI analysis within its recommendations of funds and asset management companies as a strong component of its culture. FundQuest Advisor can provide a ranking based on extra-financial/ESG criteria of recommended asset managers/funds in each sector, in addition to the usual criteria taken into account in the assessment of recommended funds:
FQA provides recommendations for the selection of managers external to BNPP AM, notably:
1. For the delegation of management of BNPP AM products (white labelling). Currently all delegated funds are equity funds. In cases of external delegation of BNPP AM funds, each external manager is required to respect the minimum responsible investment practices (e.g. Responsible business conduct and product-based exclusions, ESG integration, etc.) implemented by BNPP AM. Regarding passive strategies, BNPP AM does not delegate the management of their ETFs or open-ended passive funds to external managers; they are managed internally.
2. For multi-management products invested in external funds. FQA provides buy-lists of external funds in which BNPP AM's funds of funds can invest. FQA’s Core selection comprises more than 200 funds in most asset classes. In those cases, FQA gathers and analyses information about Responsible Investment policies applied by external managers, and it can thus provide an opinion on the level of adherence of those external managers vis-à-vis BNPP AM's Responsible Investments policies, notably in terms of sector or controversial activities excluded from potential investments.We do not count these external funds in our description of ‘externally managed’ assets, as these pooled funds are utilised as building blocks by our multi-management portfolios (which are already counted in our internally managed assets) for specific portfolio implementation purposes and change over time, whereas our ‘delegated funds’ (point 1 above) represent longer-term relationships where the structure of the product allows us to have more influence over portfolio construction (including ESG constraints such as the implementation of our exclusion lists, etc.).