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Service Providers Framework 2020

You are in Investment Consultancy » Manager selection and monitoring

Manager selection and monitoring

IC 12. ESG in manager selection, appointment and monitoring

12.1. Indicate whether you incorporate ESG factors into your manager selection and monitoring services.

Manager selection service

Manager monitoring service

12.3. Additional information. [OPTIONAL]


IC 13. Manager selection activities

13.1. Indicate what activities you undertake during the process of selecting a manager.

Research and screening


ESG people/oversight

Process/portfolio construction

Selection process and reviewing documentation

          Review manager’s ESG or responsible investing policies.

13.2. Indicate whether you use any of the following scores or targets in your manager selection process.

          Aksia evaluates both financial and non-financial factors in its ESG analysis of managers utilizing various sources including on-site meetings, fund documents and questionnaires.

13.3. Additional information. [OPTIONAL]

Aksia's research teams evaluate investment managers' approach, adoption and integration of ESG into their investment decision-making processes. Aksia circulates a Diversity & ESG questionnaire to managers which asks questions about their diversity, ESG integration, and ESG and Impact related products.

If the manager has an integrated ESG process and approach, a more detailed discussion is often scheduled with their ESG officer or similar, to review their approach to responsible investing. The responses are summarized in our research reports on the manager.

We seek to identify and evaluate material positive and/or negative ESG considerations at the fund, strategy and manager level as part of our IDD and ODD research processes. Materiality is determined on a case by case basis by Aksia's IDD and ODD teams, together with Aksia's ESG Committee if required. Aksia's assessment of materiality considers both financial and non-financial impacts that may have significant social and/or environmental outcomes.

IC 14. Incorporating asset owners’ investment principles in selection of manager

14.1. Describe how you incorporate asset owners` investment principles into the manager selection process.

          We understand that each client has specific preferences, objectives and constraints. Our manager selection approach is tailored to meet the specific requirements and investment principles of each of our clients according to their needs and preferences.

14.2. Additional information. [OPTIONAL]

IC 15. ESG in selection due diligence

15.1. Briefly describe how you include ESG factors in your due diligence process for manager selection.

          Aksia seeks to include ESG factors in our due diligence process through the evaluation of the ESG processes and degree of ESG integration into the investment processes by investment managers.  Aksia also assesses ESG factors (both positive and negative) of investment managers and their Fund’s strategies and underlying investments. Aksia is sourcing sustainability focused investment strategies in consideration of specific client objectives.

15.2. Additional information. [OPTIONAL]

IC 16. Monitoring investment managers on ESG

16.1. Indicate whether you set any of the following to measure compliance/progress, or use the following information to review and evaluate the investment manager.

Setting measures for the investment manager as part of the monitoring process

          Aksia evaluates ESG integration practices of investment managers and highlights ESG considerations at the portfolio, strategy and manager level in our analysis.

Reviewing and evaluating information from the investment manager as part of the monitoring process

16.2. Describe how you raise and manage concerns when monitoring investment managers on ESG factors.

          Aksia raises and manages ESG concerns when monitoring client investments by highlighting ESG risks and issues in our research reports which are shared with our clients and discussing ESG risks at the portfolio level with the investment manager. As part of this analysis, Aksia evaluates the materiality of the exposure in question and the materiality of the potential issue, considering both financial and non-financial factors. Aksia also publishes ad hoc desk-notes to our clients outside of the regular research cycle, which may flag new and emerging ESG issues that Aksia considers to be material.  

Aksia’s advisory team maintains an ongoing dialogue with our clients, which includes raising and discussing ESG issues identified in our research, particularly where clients have relevant sensitivities on specific ESG factors.  

Potential issues or highlights are raised to the ESG Committee by the relevant investment or operational due diligence professional. Subject to a majority vote of the ESG Committee, a description of the ESG consideration (negative or positive) may be included in the operational due diligence report. The identified ESG considerations are re-evaluated and reported at each annual operational and/or investment due diligence update, as applicable.

16.3. Additional information. [OPTIONAL]

IC 17. Reporting back to asset owners

17.1. Indicate whether you report back to asset owners on your manager selection and/or monitoring activities.

17.2. If yes, describe how you report back and the frequency.

          Aksia proactively makes recommendations regarding client investment policies, portfolios and managers, and our advisory and research teams regularly review each advisory  client’s portfolio and underlying investments. Aksia documents its recommendations, and all reports and monitoring updates are made available to clients directly through our online client platform.

17.4. Additional information. [OPTIONAL]

IC 18. Demonstrating value on manager selection, appointment and monitoring

18.1. Describe how you measure, track or otherwise demonstrate your value on manager selection and monitoring services.

          We conduct thorough due diligence ahead of each investment and monitor advisory client investments on an ongoing basis. The monitoring process includes the following teams:   

- Aksia’s risk team is independent from, but complementary to, the investment due diligence team and conducts its own risk monitoring, which includes monthly hedge fund risk exposures and quarterly loan level risk monitoring and transparency for private market funds.   
- The IDD team monitors investments through monthly hedge fund and quarterly private market fund updates, quarterly data requests, and annual re-underwriting of hedge funds.   
- The ODD team performs an annual re-underwriting of hedge fund investments and annual document review for private fund investments.   
- The portfolio advisory team sources investments, makes recommendations and monitors the portfolio on an ongoing basis. The team works in tandem with and incorporates information from the investment and operational due diligence, risk, and client operations teams to review portfolio construction and exposures, via ongoing overall portfolio monitoring and regular formal portfolio reviews.

18.2. Additional information. [OPTIONAL]

IC 19. ESG in manager selection, appointment and monitoring (Private)