Social alpha: The next step in evolving fiduciary duty

Investors need to take a long-term view

For the first time recently, I was asked by a client to demonstrate our social alpha:

'So, I understand your performance alpha drivers, now please explain your social alpha drivers?' I found the question very interesting, particularly given my belief that the fiduciary duty of asset managers will evolve to take account more directly of what we deliver to society. This is exactly what our client was asking, albeit using a different term. The fact that social alpha was separated from performance alpha was logical as delivering the former will not automatically improve the latter. 'Doing good' hopefully translates into' doing well' over time but it is not a directly...