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Rothschild & co Asset Management

PRI reporting framework 2020

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Basic information

OO 01. Signatory category and services

01.1. Select the services and funds you offer

Select the services and funds you offer
% of asset under management (AUM) in ranges
Fund management
Fund of funds, manager of managers, sub-advised products
Other

Please specify

          Managed accounts
        
Total 100%

Further options (may be selected in addition to the above)

01.2. Additional information. [Optional]


OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

France

02.2. Indicate the number of countries in which you have offices (including your headquarters).

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

163 FTE

02.4. Additional information. [Optional]

Rothschild & Co Asset Management Europe (R&Co AM Europe) is the asset management company of Rothschild Martin Maurel.

R&Co AM Europe was created on July 1, 2017. This company brings together the asset management activities that previously existed at Martin Maurel Gestion and Rothschild & Cie Gestion. R&Co AM Europe is a 100% subsidiary of Rothschild Martin Maurel, which is indirectly wholly owned by Rothschild & Co.

R&Co AM Europe is a limited partnership fully owned by Rothschild Martin Maurel. The legal structures of the management and parent companies are such that the limited partners are jointly and fully accountable for the firm’s liabilities.

Brief History of the firm

The Group has been developing asset management activities for third parties since 1982, when the Rothschild family relaunched its banking activities in France following the nationalization of Banque Rothschild in 1981.

Since then, asset management and wealth management have grown strongly, thanks to strong organic growth and some targeted acquisitions:

• In 2001, the Group strengthened in wealth management with the acquisition of SOGIP, an independent bank with family-owned capital.

• In 2010, the service platform activities (Selection R) for independent advisors were divested to focus solely on funds and mandates management for institutional investors, funds pickers, wealth clients and wealth management advisors.

• In 2011 and 2012, the alternative management activities, already started in early 1993, were reinforced with the acquisition of Héritage Asset Management and then HDF Finance, enabling the Group to position itself among the leaders in alternative investment solutions in open architecture.

• In June 2016, the Rothschild and Maurel families announce the merger of the two respective holding companies, Rothschild & Co and Compagnie Financière Martin Maurel, in order to create one of France’s leading independent private banks.

• In 2017, the asset management (Rothschild Asset Management) and the Private Banking (Rothschild Martin Maurel) activities are separated on the occasion of the merger of the two groups.

• In December 2017, Rothschild HDF Investment Solutions, the subsidiary specialised in open-architecture and investment solutions, merged into Rothschild Asset Management.

• On 2 November 2018, Rothschild Asset Management is renamed Rothschild & Co Asset Management Europe.

 


OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

03.3. Additional information. [Optional]

Please note that subsidiaries of the parent company, Rothschild& Co, are signatories on their own.
In fact, Rothschild & Co private bank in the UK (Rothschild & Co Wealth Management UK), Rothschild & Co Merchant banking (Five Arrows) and the Swiss entity with its German subsidiary (Rothschild & Co Bank AG & Rothschild & Co Vermögensverwaltung GmbH) are independent signatories.

 


OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

31/12/2019

04.2. Indicate your total AUM at the end of your reporting year.

Include the AUM of subsidiaries, but exclude advisory/execution only assets, and exclude the assets of your PRI signatory subsidiaries that you have chosen not to report on in OO 03.2
Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

04.4. Indicate the assets which are subject to an execution and/or advisory approach. Provide this figure based on the end of your reporting year

04.5. Additional information. [Optional]

 

Rothschild & Co Asset Management Europe total AUM figures correspond to different and complementary businesses:

- Direct investment (open-ended and dedicated funds and mandates): covering listed equities and fixed income, including convertibles
- Long-Only fund of funds (open-ended and dedicated funds and mandates): covering equity, fixed income, convertibles and vanilla absolute performance funds sub-funds selection
- Funds of Hedge Funds
- Managed Accounts: two platforms, one specialized on alternative UCITS (external AIFM onboarding in a UCITS format) and one on long-only differentiating investment strategies

The above reported Asets under Management include only our strategies covered by an ESG or SRI approach, that is our direct investment products and our long-only funds of funds.

FoHF and Managed Accounts businesses are excluded of our reporting perimeter, as it used to be for the last reporting years and reports. Nevertheless, when selecting an external manager, we do assess its financial, compliance and sustainable profile, through our fund of funds management ESG methodology and questionnaires. As long as the partnership exists, we monitor, verify and update regularly our due diligence information. Nonetheless, we are having regular responsible investment committees and reflexion processes on adjusting our sustainable framework and methodologies to better capture those investments.

Regarding our reported AuM and businesses, a common ESG framework is set and applied on almost all of our other businesses:

- We do apply a common set of exclusions linked to controversial weapons (Oslo and Ottawa Conventions), on all our investments (Long-Only FoF and Direct Invesment funds).
- On most of our direct investment products, are excluded issuers in breach with certain fundamental principles.
- The integration of extra-financial criteria and data within our analysis: our analyst and investment management teams use our provider’s research (MSCI ESG Research), ONG’s reports, brokers publications, … and they integrated discussions with companies’ management on specific ESG topics.
- ESG rating of our portfolios based on our provider’s data, MSCI ESG Research. Notations are calculated with a best-in-class approach. We have a common objective of a minimum BBB ESG score for all our direct investment portfolios.
- Carbon intensity measures with a specific analysis of the difference with the benchmark, and a focus on the top 5 contributors (to the carbon intensity) through their environmental risks and carbon profile analysis
- An active engagement policy based (i) on a voting policy respectful of the sustainable investment principles, (ii) on a proactive dialogue approach with companies (during meetings or common collaborative initiatives) and our membership to well-known and leading initiatives promoting sustainable investment and its principles (UN PRI, Responsible Investment Committee of the AFG, Climate Action 100+, …).

To summarise, different types of ESG processes are co-existing within our portfolio management expertise:

- Direct investments – Mainstream ESG process: almost all our directly managed funds follow a comprehensive process relying on (i) exclusions of companies that do not comply with the Oslo and Ottawa Treaties and a number of fundamental principles, (ii) the monitoring of the portfolio's ESG rating and carbon intensity (with a common minimum portfolio rating objective) and (iii) an enagement policy, etc.

- Direct Investments – SRI process: starting from 2019, a new ESG-reinforced scope, the “4Change” SRI offering is included in our ESG offer. During 2019, we decided to go further in terms of Responsible Investing products offering and methodologies. We thus launched a new SRI funds range, the "4Change" range, at the end of 2019 made up of 3 SRI certified products (French SRI label) testifying the quality of our sustainable investment methodologies and process. We have implemented innovative strategies on the direct investment side by creating the « 4Change Climate » (one of the first French  dynamic low carbon strategy) and the « 4Change Human Values » (human capital and social challenges as key performance drivers) offering.

- Direct investments -  Light ESG process: A minority of our direct investments are not covered by the above described ESG integration process. Those direct investments comply with a lighter ESG Process including a controversial weapons exclusion framework and a posteriori, they report on their portfolios’ notation and carbon intensity.

- Funds of funds ESG Process: Our long-only fund of funds activity (as mentioned above, we decided to exclude from our UNPRI reporting perimeter our alternative investment funds of funds) follows an ESG process: (i) compliance with the Ottawa and Oslo exclusions, (ii) ESG questionnaires sent to fund management companies we invest in to check their ESG practices and (iii) construction of ESG reporting tools (calculation of the portfolio rating and carbon intensity).

Over 2019, we have launched a microfinance fund which is part of our 4Change funds range. We developed a unique partnership with Symbiotics in order to offer to our clients an impact investing vehicle, which has just been granted LuxFLAG Microfinance certification (R-co 4Change Impact Finance*), through which they are able to finance microfinance institutes and lend financial capacities to micro-entrepreneurs. This product is not included within our PRI reporting perimeter.

Our annual PRI reports are based on these different ESG integration perimeter.


OO 06. How would you like to disclose your asset class mix

06.1. Select how you would like to disclose your asset class mix.

Internally managed (%)
Externally managed (%)

 

Listed equity 10-50% 30 0 0
Fixed income >50% 57 0 0
Private equity 0 0 0 0
Property 0 0 0 0
Infrastructure 0 0 0 0
Commodities 0 0 0 0
Hedge funds 0 0 0 0
Fund of hedge funds 0 0 0 0
Forestry 0 0 0 0
Farmland 0 0 0 0
Inclusive finance 0 0 0 0
Cash 0 0 0 0
Money market instruments 0 0 0 0
Other (1), specify 10-50% 13 0 0
Other (2), specify 0 0 0 0

`Other (1)` specified

          Long Only Funds of Funds
        

06.2. Publish asset class mix as per attached image [Optional].

06.3. Indicate whether your organisation has any off-balance sheet assets [Optional].

06.5. Indicate whether your organisation uses fiduciary managers.

06.6. Provide contextual information on your AUM asset class split. [Optional]

As mentioned above and as in our previous PRI reports, we do not report on R&Co AM Europe funds for which we have delegated the management function. Nevertheless, when selecting an external manager, we do assess its financial, compliance and sustainable profile, through our fund of funds management ESG methodology and questionnaires. As long as the partnership exists, we monitor, verify and update regularly our due diligence information. 


OO 07. Fixed income AUM breakdown (Private)


OO 08. Segregated mandates or pooled funds (Not Applicable)


OO 09. Breakdown of AUM by market

09.1. Indicate the breakdown of your organisation’s AUM by market.

100 Developed Markets
0 Emerging Markets
0 Frontier Markets
0 Other Markets
Total 100% 100%

09.2. Additional information. [Optional]


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