Diversity and ESG in Asset Management ✊
#136 - Philippe Zaouati (CEO of Mirova) and #137 - Johan Brenner (GP at Creandum)
This Sunday, I'm publishing two episodes that deal with the importance of diversity and ESG in asset management.
I have chosen two management companies, investing in listed and unlisted assets that take this issue very seriously, not just within their own organisation but also in the investment process itself.
In 2003, when I first began managing portfolios, the concept was in its early stages and only few people were conscious of what it meant for the future. During this time period, I encountered several pioneering managers; however, it remained very anecdotal and clearly not a selection factor. Twenty years later, it's still a burning issue. We must recognise it as a priority in order to ensure lasting change.
I'm delighted to welcome Philippe Zaouati, an influential player in the French and European financial world to this episode 🇫🇷. He created and manages Mirova (a subsidiary of Natixis), a management company that offers investment solutions combining financial performance and environmental & social impact.
On my episode in 🇬🇧, I welcome Johan Brenner - an experienced venture capitalist as well as former entrepreneur. He is currently General Partner at Creandum and speaks to us about diversity – one of the core focus points for his fund from Sweden.
We begin this discussion by clarifying the concepts of sustainability in finance, in the context of listed and unlisted assets. You’ll finally understand what this means in the context of a management team, from a regulatory point of view, notably with the notion of Article 9 funds, but also from an investment process point of view.
We explore data and how Mirova uses, processes and analyses it to enable its managers to make informed investment decisions. Philippe explains the creation of the management company alongside Natixis, and the diversification of the offer, notably towards “Natural Capital” and real assets.
We also dive into the “Mirova Forward” endowment fund, the projects they support, and delve into the “Voting Policy” and “Build up” strategy. This is a thought-provoking conversation that will surely leave you with plenty of food for thought.
Article 9 Funds
The Sustainable Finance Disclosure Regulation (SFDR) aims to harmonise and strengthen the transparency requirements for those who market or advise on certain financial products.
These obligations include providing information on the general policies adopted in the investment decision-making process or in providing advice, as well as product-related information, particularly for those products with non-financial characteristics.
Article 8 funds, also known as “Light Green Funds”, incorporate sustainability into their investment process. Article 9 funds, or “Dark Green Funds” on the other hand, are invested with a specific sustainability goal in mind.
In contrast to both of these articles is Article 6 which makes no mention of environmental considerations at all. If you want to learn more, we discuss SFDR in details on the Greenomy episode (🇫🇷) with Alexander Stevens.
Declassification
After the initiation of Level 2 of EU legislation, many funds labelled as Article 9 were demoted to the category of Article 8 classification, thus diminishing their overall value.
Philippe explains how Mirova manages to maintain this classification for all its funds and how the management company has changed its investment process.
“Voting Policy”
Management companies generally exercise their voting rights associated with shares held in managed funds according to a voting policy, which sets out general principles and specific guidelines.
Specifically, the policy outlines key governance and voting principles, describes the proxy voting process, and sets out guidelines that highlight best practice and issues that may trigger a “no” or “abstain” vote.
For Mirova, this is a critical issue, as the shareholders represented have strong ESG concerns. It was therefore crucial that we explored this during the episode.
Mirova
Created in France in 2013, Mirova is the subsidiary of Natixis Investment Managers and is dedicated to sustainable investment.
EUR 27.2 billion of assets under management
192 employees Presence in France, the United States, the United Kingdom, Brazil, Luxembourg and Singapore (via dedicated structures)
Management of listed (equities, bonds, mixed) and more recently real assets (private equity, energy, etc.)
I'm sure you know how much I enjoy interviewing the VC community. They are incredibly agile and have a strong entrepreneurial spirit that puts them in a category of their own.
I had the great pleasure of talking to Johan who is one of the most renowned names in European venture capital investing. He has had incredible success in the VC world and in entrepreneurship. He talks to us about his incredible journey with Creandum.
Diversity is a priority for me, so I had to discuss it with Johan. We looked at the ambitious diversity targets his company has set, including the presence of women in teams and in investments. Johan tells us about the implementation of their diversity index, providing us with relevant data and tangible results to date.
When we learn that almost a quarter of the companies Creandum invests in now have gender-diverse teams with one of the founders or the CEO identifying as female. It encourages such initiatives, as gender equality leads to better returns, as Tatiana Jama pointed out in the recently published Special Episode with Laetitia Vitaud (🇫🇷).
We couldn't miss the venture capital firm's flagship investments in FinTechs such as Swan and Trade Republic. Of the 120 companies Creandum has backed, it's no surprise that several have become unicorns. We discuss their unique selling proposition as well as the manager's positioning in European ecosystems.
Creandum
Creandum is a leading European early-stage venture capital firm backing some of Europe’s most successful tech companies including Spotify, iZettle, Depop, Pleo, Epidemic Sound and Trade Republic.
Offices in Stockholm, Berlin, London and San Francisco.
Creandum raised in total USD 1,3 Bn (6 funds). The last fund: Creandum VI raised EUR 448 Mio.
Swan
Swan is a “Banking as a Service” solution, co-founded in 2019 with the start-up Studio eFounders (Hexa). The start-up has been listed in "Europe's rising 100" by Sifted.
👉 My episode 🇫🇷 with Nicolas Benady (Swan) - Behind the scenes of “Banking as a Service”.
💡Shares
📗 What my guests of the week recommend:
🧐 If you want to go deeper:
Sustainable Finance Disclosure Regulation - Article 9 Funds or “Dark Green Funds” (Deloitte) 👉 Read
🎧 The episodes
Creandum (🇬🇧)
Spotify / Google podcast / Deezer
Mirova (🇫🇷)
Podcastics / Apple Podcast / Spotify / Google podcast / Deezer
👋 Contacts
Philippe Zaouati / Mirova
Johan Brenner / Creandum
Sources : ACPR, Deloitte.