Event Voice: Your Questions Answered by WHEB Asset Management at the Investment Week Sustainable & ESG Market Briefing

Event Voice: Your Questions Answered by WHEB Asset Management at the Investment Week Sustainable & ESG Market Briefing

Can you give a brief overview of your strategy in terms of what you are trying to achieve for investors, your investment process and the make-up of the investment team? 

WHEB Asset Management is a specialist fund management business owned and managed by some of the most experienced practitioners of sustainable investment in the sector. The business is focussed on a single investment strategy committed to positive impact investing. The strategy seeks to generate superior returns from global equities by investing in companies providing solutions to some of the most serious environmental and social challenges facing mankind over the coming decades.

The investment philosophy of the fund is built around sustainability, growth, quality and valuation. The fund is focused on nine sustainable investment themes; five environmental (cleaner energy, environmental services, resource efficiency, sustainable transport, and water management), and four social themes; (education, health, safety, and well-being). Within each theme, we identify the leading companies, carrying out deep financial as well as environmental, social and governance analysis, adding further value through our stock selection. Individual stocks are selected through a ‘bottom-up' stock-by-stock fundamental and rigorous research process. Our portfolio construction disciplines ensure a diversified and balanced global equities portfolio, with strong risk disciplines.

The Investment Team of five investment professionals take a collegiate approach and focus their time exclusively on this single investment strategy, while separate personnel focus on management, business development and risk. All team members have significant experience in managing sustainability investment businesses and funds, having dedicated their careers to this sector, and have worked together in different combinations over long periods of time. In aggregate, the team has over 60 years of collective experience in sustainable investing.

How have you been trying to weather the storm caused by the Covid-19 pandemic and what could be the longer-term implications for your strategy? 

The sustainability solutions the companies in our strategy provide are well-suited to supporting the pandemic response, which has served as something of an "accelerator" of sustainability issues. The themes of health, safety and resilience, which are features of the products of many of our investee companies, all came to the fore in the pandemic.

A large number of portfolio companies demonstrated that helping the world to become more sustainable also means helping it to respond to pandemics. Companies in our Health theme contributed to the pandemic response along with the strategy's industrial companies, particularly in the Resource Efficiency theme, demonstrated that efficiency can also mean resilience.

During the second half of the year, there was a historic shift in global political attitudes to sustainability, and particularly the challenge of man-made global warming. This shift has been supportive for all of the stocks, but the Cleaner Energy theme was notably supported.

The prospects of our strategy have in fact rarely been brighter. 2020 may be mostly remembered for the pandemic, but it was also a momentous year in sustainability. A number of sustainability trends have accelerated due to the pandemic, be it renewable energy, electric vehicles, supply chain automation and health and safety. We expect these accelerated trends will continue over many decades to come.

Can you identify a couple of key investment opportunities for your fund you are playing at the moment in the portfolio? This could be at a stock, sector or thematic level.

Increasing climate ambitions, including net zero carbon emissions targets, drove a strong performance in renewable energy stocks in 2020. One company that we believe will benefit from this and that we have recently added to our portfolio is Vestas. It is a leading wind turbine manufacturer with the largest global installed base. It designs, manufactures, installs, and services wind turbines across the globe. With the increasing global ambition for renewable energy, Vestas will continue to make meaningful contribution in the shift to renewable energy. With the strong tailwind for wind energy, it is one of the clear beneficiaries as the world shifts away from fossil fuels.

2021 will almost certainly see an acceleration in the shift towards electric vehicles (EVs). EVs already accounted for more than 10% of all new vehicle sales in the EU by the end of 2020. Globally, passenger EV sales are expected to grow by nearly 60% this year to 4.4 million. With this in mind we hold a number of automotive suppliers in the strategy whose technologies enable car manufacturers to transition to electric vehicles. Aptiv is one example, which has a full portfolio of advanced technologies to deliver safer and greener mobility solutions.

Click here to learn more about WHEB Asset Management.

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