Calvert drops Amundi’s Kleinwort Benson Investors as subadvisor for energy solutions fund

Loss for environmental specialist now majority owned by Amundi

Kleinwort Benson Investors (KBI), the Dublin-based asset manager now majority owned by French asset management giant Amundi, will no longer sub-advise a renewable energy fund offered by Calvert Investments, the US socially responsible investment (SRI) specialist with $12.2bn under management.

It’s part of an ongoing shift by Calvert to move its funds to a passive strategy.
Amundi acquired 87.5% of KBI – a pioneer in environmental thematic investing – from French finance group Oddo & Cie in May this year for a sum media reports put at up to €150m, with KBI’s management team headed by CEO Sean Hawkshaw taking 12.5%.
Calvert announced this week that it is shifting its Global Energy Solutions Fund (CGAEX) from being actively managed to a passive strategy that will track the performance of a new energy research index.

It is hoped that the move will cut costs for Calvert’s clients and deliver steadier returns. It revealed that KBI would no longer manage the fund, which it has overseen since 2007, in an SEC filing
detailing the changes.

The Maryland-based asset manager’s new index, called the Calvert Energy Research Index (CALNRG), is centred on companies that either manage their energy use in a sustainable manner or who are directly involved in facilitating the transition to a low-carbon economy.Though the index will exist as a product in its own right, from October 2016 it will also be the basis for Calvert’s CGAEX fund, which will then become a fully passive product and become slightly cheaper for customers.

A press release issued by Calvert says that the company “believes that society has signalled…that is time for a global energy transformation”, and that the changes have been prompted by the Paris agreement and the heightened importance placed on sustainable business practices.

Geoff Blake, Director, Head of Business Development & Client Services at KBI, told Responsible Investor that the change comes as part of a wider shift in Calvert’s business model “including the strategic decisions to bring more of the firm’s asset management in-house and to manage a higher proportion of its assets on a passive base reducing the firm’s cost base”.
KBI also previously managed Calvert’s Global Water Fund until that also swapped to a passive strategy in March 2016.

Blake noted that Calvert has launched “a number of passive products” in the past months to replace its internally managed products, but that the change comes at a good time for KBI. “The Calvert notification comes during a period of strong growth and inflows across all of our strategies and all the geographies we serve, in particular our Global Resource Solutions fund,” he added.