GLG RI Sustainable Water and Circular Economy
The GLG Sustainable Water and Circular Economy is a long-only, actively managed equity thematic strategy with a strong sustainable focus. The strategy invests solely in companies that provide solutions and technologies related to the fight against water scarcity, that improve the supply and treatment of high-quality water, and/or address the challenges of the circular economy.
- Managed by Yohann Terry and Jann Breitenmoser who have 25 years combined experience in thematic and sustainable equities
- Combined investment universe designed to increase diversification and opportunities for alpha generation
- All-cap strategy with a bias towards mid-cap stocks1
- More than 10 years of experience investing in mid-cap industrial companies - key to addressing water challenges – enhanced by Man Group quantitative capabilities
- Style agnostic with a balanced portfolio split among four style buckets: high quality growth, value cyclicals, defensive, and special situations
- Strategy is actively managed and intends to use the MSCI World Net Dividend Total Return (the “Benchmark”) for performance comparison purposes. Although the Benchmark may be used for performance comparison purposes, the Strategy’s investment policy is not constrained by the Benchmark
- For a full list of risks in relation to this strategy please refer to the Considerations section at the bottom of this page.
Approach
The strategy is designed to generate returns while targeting a positive environmental impact. The team seeks attractive investment opportunities across a combined universe composed solely of companies that contribute to the sustainable supply and treatment of water, the optimisation of water use, the prevention of pollution, and activities related to the circular economy including waste reduction, re-use and recycling and the sustainable disposal of waste. Many of the companies within these sectors are positioned to benefit from accelerating structural trends (including but not limited to investment in water and recycling infrastructures, rising awareness that soil & water pollution is a threat to human health and biodiversity, and more favorable regulations) that continue to drive growth. At the same time, valuations remain reasonable, creating opportunities for alpha capture.
Sustainability is at the core of the investment process. The stock selection process is based on a bottom-up approach where sustainability criteria are integrated in each step of the process. The strategy seeks to promote the United Nations Sustainable Development Goals, predominantly focusing on companies that contribute to the following UN SDGs: Clean water and sanitation (goal 6), Life below water (goal 14), Life on land (goal 15) and Goal 12 on Responsible consumption and production. All companies within the investment universe are assessed for exposure to potentially harmful businesses to ensure adherence with the "do not significantly harm” principle with the aim to eliminate controversial exposures, align with international norms and minimise ESG risk. The Strategy has a sustainable investment objective within the meaning of the Sustainable Finance Disclosure Regulation (SFDR).
The team will conduct rigorous fundamental analysis, adjusted to fit the style of each stock, to build an investment case. Earnings outlooks, valuations and cash generation properties, with a view also to the sustainability of these cash flows, along with material ESG metrics are all appraised during the investment process. Attention will be paid to relative earnings revisions, catalysts and scenario analysis as well. The investment process also features a top-down appraisal of the different end markets which, in the team’s view, is critical to picking attractive industrial companies as these sectors tend to perform better or worse at different points in the cycle.
This research process results in a concentrated but diversified portfolio of 30-60 positions. The team remains agnostic on style and prefers to build a balanced portfolio that is split among four style buckets - high quality growth, value cyclicals, defensive, and special situations. The portfolio will have a bias towards value cyclicals and growth, but the flexible approach to style exposures could result in evolving factor exposures over time1.
The strategy will invest at least two thirds of its net assets (after deduction of ancillary liquid assets) in equity securities (excluding securities convertible into equity securities) of issuers globally. The Strategy will invest primarily in equity or equity related securities listed or traded on Recognised Markets in OECD member states.
| Approach | Long-Only |
| Asset Class | Equity |
| Geographic Focus | Global |
1. The limits and/or targets illustrate the Investment Manager’s current intentions, and are subject to change without notice. These risk guidelines and/or limits are provided for information purposes only and represent current internal risk guidelines. There is no requirement that the Strategy observes these limits, or that any action be taken if a guideline limit is reached or exceeded. Internal guidelines may be amended at any time without notice.
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