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Rating:Calvert Sexes Up Social Responsibility Not Rated 4.0 Email Routing List Email & Route  Print Print
Thursday, March 27, 2014

Calvert Sexes Up Social Responsibility

Reported by Tommy Fernandez

Sometimes, even the manager of the chess club dances the lambada.

Executives from veteran social responsibility investing shop Calvert showed off some of its sexy newer twists to a roomful of financial journalists Thursday morning.

At the event, hosted at the storied Michael's on W. 55th Street, with its nude wall sculptures in the vestibule, complex abstract art and beautiful collections of tiny little yellow flowers on long branch-like thingies.

And,…the breakfast actually featured eggs and bacon -- which is becoming a rarity at these events (fund firms take note. Journalists are poor and like to feed their faces.).

The event, which took place in the back room and included over 30 press folk and fundsters, featured Lynne Ford, executive vice president of Calvert Investment Distributors, and PMs Catherine Palmer Roy, Calvert's senior vice president and chief investment officer for fixed income; Noel O'Halloran, director and chief investment officer at Calvert subadvisor Kleinwort Benson Investors Internationaland Gerrit Heyns, chief executive officer at Osmosis Investment Management.

Also in attendance were Michael Davis, senior vice president and director of institutional sales and Anthony Eames, national sales manager.

Ford, who has held her role at the 38-year-old Calvert for roughly two years now, talked up the new sexy role socially responsible investing has in the financial industry.

Noting that one out of every eight asset management dollars is invested in socially responsible and/or sustainable strategies, Ford outlined the rapid growth of the sector from a guilt-ridden and earnest niche to a cutting edge category that offers now not only clear consciences but aggressive alpha.

"SRI is hardly a niche anymore," she said, noting that in 1995, there were only 55 socially responsible strategies. Ten years later, this grew to over 200 strategies with roughly $180 billion in assets. In 2012, that figure has hit over 700 strategies with nearly trillion dollars in assets.

To-be-sure, Ford and the PMs said, social responsibility and sustainability investing is accelerating in part because more investors want to vote for their social values with their investing dollars.

However, the cutting-edge investing methodologies frequently tied with sustainability investing are giving PMs a wider array of tools for finding alpha in ways inconceivable to other managers.

For instance, Roy, Calvert's fixed income CIO, manages the Green Bond Solutions Strategy which uses in-depth analysis into bonds related to green development projects, pollution abatement as well as the debt of companies with cutting edge ideas for addressing green consumer demand. The strategy is also breaking in tot he area of real estate mortageg assets tied to LEED certified.

Another example of new twists on alpha is the work done by O'Halloran at Kleinwort, which manages two strategies for Calvert. The strategy managed by O'Halloran focuses on water, and has been one of Calvert's best selling funds over the past 18-months.

The global water fund looks for opportunities related to five factors: supply of water (only 1 percent of all the water on earth is usable); demand (which doubles every ten years); population growth (2 billion more expected in 10 years); emerging market growth and climate change issues.

The third example of SRI can lead to sexier returns is the work done by Heyns of Osmosis, which manages a product for Calvert. Heyns' group analyzes data points about companies usually ignored by other investment professionals, such as water usage, pollution generation, efficiency, and so on. These sustainable metrics are important indicators of a firm's future profitability, he said, because most companies that have the discipline and forward-thinking to strive for economic sustainability generally have better returns on their assets.

"Some of the best run businesses are the most sustainable," he said. 

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