Analysis: Why who buys Robeco is important for responsible investment

Sale of fund manager raises a lot of issues

Rabobank’s looming sale of its Robeco asset management subsidiary could prove to be a decisive event in the development of responsible investing in Europe.
The Dutch bank put Robeco up for sale in April and it looks like private equity buyers are in the running for a deal reportedly worth up to €2.5bn – but what will the new owner be getting?
Robeco is one of the leading European advocates of responsible investing – integrating environmental, social and governance (ESG) factors into its investment process while making active use of its voting rights and dialogue with companies. The Rotterdam-based outfit has been offering sustainable investment products since 1995; it won its first sustainable institutional mandate (which is still running) two years later.
Importantly also for the responsible investment industry, Robeco owns SAM, the Swiss-based sustainability boutique with around €8.8bn under management, which it took full control of in 2008.
How SAM will figure in any deal is far from clear, although it seems Rabo wants to sell Robeco as a single entity. Whether the new buyer will be keen to retain SAM as a standalone business is a key question.
Robeco and SAM have been, inevitably, drifting together. If the sale hadn’t occurred it’s likely they would have continued to integrate. Whether this will occur post-sale will be significant for SAM staff and clients alike.
Another issue for the industry more broadly will be the future of SAM’s collaboration with S&P Dow Jones Indices in the venerable Dow Jones Sustainable Indexes family.SAM’s co-founder Reto Ringger, now at his new venture Globalance Bank, will no doubt be looking on with interest.

Another question will be over the leadership at Robeco post-acquisition. Chief Executive Roderick Munsters, who took over in September 2009 after heading investments at Dutch pension manager APG for four years, is a leading figure in the sector, so how will he fit into any new structure? He is still only in his late 40s; would he have the appetite to run an asset manager under private equity control?
Whatever else, Robeco had a storming first quarter this year, with net cash inflows at a record €15bn; total assets under management now stand at a healthy €177bn.
Robeco’s sale comes as the fate of fellow European SRI pioneer Dexia Asset Management is still unknown. In the UK, Aviva Investors, F&C and Henderson Global Investors have gone through their own various seismic changes.
It needn’t necessarily be a concern that it is private equity that may take over Robeco – after all, the industry is increasingly ‘on message’ about ESG. With names in the frame including the likes of CVC and Permira it’s even possible that a private equity buyer will be a paid-up signatory to the UN PRI. So in that sense it will be a test of that industry’s commitment to responsible investment.

Robeco traces its roots back to 1929. What its future holds should interest everybody who cares about how assets are managed – and how companies are held to account.