RI – change is in the air
Responsible investment (RI) is turning towards the mainstream, with studies showing Australian’s are already gearing for a significant change in the market.
A survey of clients and trustees conducted by AXAInvestment Managers (AXA IM) in Melbourne recently found 44 per cent expected a significant increase in public scrutiny of asset owners and fund managers on the issue of RI.
“We conducted this survey all over the world, in New York, London and Tokyo, and it was very surprising to find Australia’s results were by far the highest I’ve seen so far,” said AXA IM director of RI Raj Thamotheram.
“Independent research from the Feri Fund File has shown net new funds into RI funds increased three times as fast when compared to net new funds into non-RI funds in the period 2004 to 2006, and preliminary data is showing it’s increasing even faster currently,” Thamotheram said.
“In Australia, while institutional funds were still the largest sector, with 61 per cent, retail now accounts for over 30 per cent of the market, a 44 per cent growth from new investments into existing funds.”
Thamotheram said the key to the future of RI is better research, with some asset owners encouraging their fund manager to become full members of the Enhanced Analytics Initiative (EAI), and rewarding good research through broker commission allocations.
“Fund managers will do what asset owners want. And asset owners will ask for what they see is available in the market. So there is this collaborative arrangement, with asset owners in the governance role, which is the way it should be.
“To move this debate away from the tokenistic values to a more systemic, holistic approach ... the supply chain needs to move.”
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