Our externally managed asset classes include fund of funds mandates and two externally managed equity funds Synergy Emerging Markets and Synergy Smaller Cies co-managed by local fund managers. In 2019, these externally managed asset classes represented approximately 4% of our AUM. Please note that Synergy Emerging Markets was closed in December 2019.
- Synergy Emerging Markets : In 2017, we analyzed the current ESG practices of each fund manager of the fund by sending them a detailed survey and presented the results as well as our own approach during the investment committee. Based on these exchanges, we proposed a ground for a common ESG approach including common exclusion crtieria, integration of Governance criteria, ESG controversy monitoring, PRI membership and proxy voting. In addition, we continously support our partners individually in the development and implementation of their approaches by sharing our experience and ressources on an ad-hoc basis. The outcome is a success with two asset managers signing up to the PRI and four out of five formally integrating ESG criteria in their investment decision making.
- Synergy Smaller Cies : We incorporate ESG informally into the monitoring process. The ESG performance of companies within the portfolio is adressed on an ad-hoc basis during investment committees.
In 2019, as part of our fund of funds management, we formalized the way in which responsible investment applies to investment manager selection appointing and monitoring process directly into our fund selection process as validated by the internal control function.
The process takes into account the following:
- The requirement for all investment managers in our eligible universe to be PRI signatory and/or demonstrate an ESG integration process (as relevant);
- The evaluation of the adequacy of the means put in place by the investment managers to ensure ESG integration (e.g. headcount);
- The evaluation of the way ESG criteria may affect the portfolio construction;
- The monitoring of the 10 biggest position of each portfolio we hold, to verify alignment with the ESG integration process;
- Divestment if we detect companies that are not in line with Sycomore AM exclusion policy of that are severly affected by recurring controversies.