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.