Perennial goes long on ESG
Specialist equity manager Perennial Value Management last week announced the launch of a dedicated investment unit or ’boutique’ within their growing stable of high performing strategies. The group launched Perennial Better Future, a new business that will focus solely on developing and managing the group’s ESG strategies.
The group, which managed the Better Future Trust, an Australian smaller companies strategy, and the eInvest listed vehicle, will be led by portfolio manager Damian Cottier, with Emilie O’Neill as ESG and equities analyst, and George Whiting who will head up the institutional and retail business development for the boutique. The team will remain supported by Perennial’s entire research and marketing staff but simply have a more dedicated focus.
Established in 2000, by well known investor John Murray, the traditional value-focused investors have pivoted into smaller companies and more sustainable strategies, seemingly building a competitive advantage in recent years. This is reflected in the returns of the Perennial Better Future Trust, up 13.3% since inception in 2018, outperforming the Small Ordinaries by 6.2%.
According to Anthony Patterson, executive director of Perennial Partners, the Perennial Better Future business was born out of a passion for sustainable investment. “The world of sustainable investment has made a 180-degree turn in the last 15 years. Today, an investment in a sustainable business contributing to a better future is far more likely to lead to better returns than investing in conventional businesses,” he said.
As highlighted in the follow up report from our ESG Masterclass, proprietary or inhouse data is becoming the most important differentiator and a key to outperformance. According to Patterson “Perennial Partners has developed a leading-edge capability in sustainable investment and this business has been four years in the making. It launches having proven its investment thesis that benchmark outperformance can be achieved by investing in companies that are contributing to the improvement of society.”
According to Cottier, rather than merely choosing the most sustainable stocks within sectors, the strategy was predicated on finding companies that derive the majority of revenue from positive outcomes, with zero revenue from harmful activities.