Focus on sustainable and responsible investment. Pinner: “Current AuM for SRI funds is EUR 1.1 billion, which is equal to 3% of Raffeisen Capital Management’s total AuM. We expect 10% to be achievable over the next five years”.
About two years ago, Raiffeisen Capital Management (RCM) decided to open a new department focused on sustainable and responsible investment (SRI). Now, the company has three “Raiffeisen Sostenibile” funds, that meet different client needs, but it is planned to increase the fund range on an ongoing basis. “The current AuM for SRI funds is EUR 1.1 billion, which is some 3% of Raffeisen Capital Management’s total AuM - Wolfgang Pinner, Chief investment officer sustainable and responsible investment in Raiffeisen Capital Management, said - We expect 10% to be achievable over the next five years”.
Pinner, why Raiffeisen Capital Management has chosen to create, about two years ago, a department focused on sustainable and responsible investment (SRI)? How it is evolving?
The decision to create a new department made it possible to actively participate in the fast growing SRI-market, especially in Austria and some neighboring countries.
How do you see the SRI market in Europe? What are your long terms forecasts?
We see ongoing growth, both in absolute terms and in the quality of SRI. A double-digit percentage of core SRI strategies should be achievable over the next five years.
What is your investment approach?
The sustainable investment process of Raiffeisen Capital Management is based on three subsequent levels of analysis. On the first level there is an assessment for exclusionary criteria. These criteria involve ESG (extra-financial) criteria as well as financial criteria. As far as ESG criteria are involved, companies or countries may be excluded for instance for the use of child labour in the production process (company level) or for the existence of death penalty (country level). On the second level of analysis there is a detailed in-depth analysis of the individual companies respectively issuers. For the detailed analysis of the equities and issuers a proprietary model is applied which combines a broad set of financial and sustainability data. The ESG part consists of stakeholder analysis, ESG key performance indicators (KPI) and engagement. The third level focuses on the portfolio construction process.
Could you present your SRI funds offer? When did you launch your first fund? How many funds there are in your offer? Are you planning to launch new funds?
The three “Raiffeisen Sostenibile” funds meet different client needs when it comes to risk and return expectations as well as volatility. The Raiffeisen Sostenibile Breve Termine addresses investors who want to invest with low risk in the currently difficult fixed income markets. The Raiffeisen Bilanciato Sostenibile invests 50% of its assets in fixed income investments, the remaining 50% in equities. The Raiffeisen Sostenibilie Azionario invests in global equities only. The first fund was launched more than ten years ago, however, the new process for the fund range was adapted only in 2014. It is planned to increase the fund range on an ongoing basis.
What is your current AuM, and what is an achievable target for you? What is the weight of SRI on the total AuM?
The current AuM for SRI funds is EUR 1.1 billion, which is some 3% of Raffeisen Capital Management’s total AuM. We expect 10% to be achievable over the next five years.
What is the target for your products (institutional or retail)? Which funds are dedicated to more conservative investors and which one are for more aggressive investors?
The Raiffeisen Sostenibile Breve Termine is directed primarily to institutional investors, but also to private investors with very low risk budgets. The Raiffeisen Bilanciato Sostenibile is primarily focusing at retail investors and small institutionals. The Raiffeisen Sostenibilie Azionario is directed at both retail and institutional investors.