Some of the world’s best-known asset managers have been exposed for failing to walk the talk on stewardship and responsible investment in an independent report published by investment sector watchdog, ShareAction.
The report, which ranks asset managers on transparency and responsible investment, checked under the bonnet of the 33 largest Asset Managers in the UK, who are responsible for investing £13.8 trillion of assets for pension savers, charities, universities and individuals all over the world.
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This is ShareAction’s fourth survey of the industry’s performance on responsible investment and provides the only available independent benchmark on this topic.
All of the managers surveyed publicly commit to active oversight of the firms in their portfolios, having signed up to the UK Stewardship Code, first published in 2010 in the wake of the financial crisis. 31 of 33 have also signed the Principles for Responsible Investment.
In practice, ShareAction finds a vast gulf in performance between the industry’s leaders and laggards on a skill-set that is critical to outcomes for the UK’s swelling ranks of pension savers.
The report scored each firm out of a possible 143 points for complying with industry best practice.The best ranked firms were Threadneedle Asset Management (125 points), Aviva Investors (121 points), Jupiter Asset Management (120 points), Hermes Investment Management (110.5 points), and Legal & General Investment Management (108.5 points).
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By GlobalDataThe worst performing firms were UBS Global Asset Management (29 points), M&G Investment Management (26 points), Santander Asset Management (18 points), J O Hambro Capital Management (15 points) and Wellington Management (12 points).
ShareAction Chief Executive Catherine Howarth says: "Our survey blows the cover on a wide range of big names in asset management who still refuse to be transparent about how they invest clients’ money. The leading firms show a commitment to acting in clients’ best interest that we applaud. Trustees of pension schemes should pay close attention to these results, and encourage take up of the individual recommendations made to each firm in this survey."
"We’re proud to provide the only independent assessment of asset managers’ performance on responsible investment. The investing public is strongly supportive of getting a better deal from this industry and want to see their savings with fund managers that promote sustainable, socially responsible wealth creation by major companies."
Report author Stefano Galdiolo says: "In our most comprehensive survey to date, we show that a hard core of major investment firms still refuses to disclose basic information about how they vote on clients’ behalf at company AGMs. Similarly, there are still some dinosaurs in the sector who consider it beneath them to disclose a conflicts of interest policy."
"We hope the regulators address this problem as a matter of urgency and that such firms will be embracing more fully and genuinely Responsible Investment practices as the failure to do so will no doubt result in significant commercial disadvantages to them for showing such scant regard for clients’ interests."
