Event Voice: Your Questions Answered by Kempen at the Sustainable Investment Funds to Watch

clock • 2 min read
Event Voice: Your Questions Answered by Kempen at the Sustainable Investment Funds to Watch

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?

Our aim is to offer attractive, sustainable returns by delivering investment alpha aligned with the Paris agreement and with exposure to a number of the UN Sustainable Development Goals.  Our belief is that companies that are well-aligned with the transition to the sustainable economy will be more successful.

We believe that our long track record of investing with conviction for the long term, fully integrating an assessment of ESG risk and opportunities into the investment decision making process and empowering the portfolio management teams to follow an active ownership approach provide us with the tools needed to deliver for our clients. 

The Sustainable Equity team consists of 5 professionals with complimentary skills and backgrounds.  They each cover specific sectors, contributing to the investment process and the selection of stocks for the portfolios.  At Kempen, the role of Analyst and Portfolio Manager is combined, which means that all 5 teams members have analytical as well as portfolio management responsibilities, and team members actively discuss and challenge each other about investment opportunities.  

How are you positioning your portfolio in uncertain times? 

We believe that the heightened uncertainty in markets provides both risks and opportunities.  We seek to invest in a concentrated portfolio of high quality businesses, across a sufficiently broad spread of industries and geographies.  Portfolio weights are based on valuation, quality, size and liquidity, with no individual stocks being responsible for outsized risks.  Every stock in portfolio is analysed for a number of factors to develop a company quality score, which translates into a WACC used when valuing the company. 

In recent times we have steadily increased exposure to healthcare, industrials and technology as market volatility presented attractive valuation opportunities.  Conversely we have been decreasing exposure to financials, materials and stables, selling into strength in many cases. 

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. (Max 200 wo At the moment we see opportunities created by the volatility in raw material prices, especially in oil and gas.  Oil derivatives are present in the vast majority of consumer goods and the transition to a sustainable economy is driving significant innovations in the race to replace these oil based ingredients with sustainable alternatives. 

We also see opportunities in the healthcare space with the development of targeted therapies for a range of medical conditions, with the potential to reduce reliance on broad spectrum treatments and improve the lives of millions of people.

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This post is sponsored by Kempen 

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