Candriam charges up with new SRI funds, dedicated SICAV and an RI Institute

CEO, Naïm Abou-Jaoudé says new US partnership will also explore more SRI indices and ETFs.

Candriam Investors Group, the €94.5bn pan-European asset manager owned since 2014 by New York Life Investment Management (NYLIM), is charging up its extensive SRI fund range – much of which was put in place as the former Dexia Asset Management – with the launch of two new funds, a dedicated Luxembourg SICAV to house all its SRI funds, and the creation of an Institute for Responsible Investment. The firm is also seeking to export its SRI expertise to the US home of its parent in the areas of ESG indices and exchange traded funds via a partnership with IndexIQ, a related specialist subsidiary of New York Life. Candriam hired its first dedicated staff in the US in the last few weeks.
Candriam, which stands for Conviction and Responsibility In Asset Management, was given its name at the time of the €380m acquisition of Dexia AM in 2014 by NYLIM, which is a subsidiary of the New York Life Insurance Company, the largest mutual life insurer in the US, founded in 1845.
Naïm Abou-Jaoudé, CEO of Candriam, said the fund manager would shortly launch two new SRI funds, an emerging market debt and high yield fund. Significantly, he said the manager will also regroup all 17 of its SRI-related funds (including the two news funds when they launch) in a Luxembourg structure called SICAV SRI, in order, he said, to present a more homogenous and transparent set of criteria for its SRI funds range.
He said Candriam would seed finance the Institute for Responsible Investment, which will set up links with universities around the world, notably in Belgium, France and the US, and would also invest in small companies promoting sustainability solutions.Under Dexia AM, the manager grew one of the broadest SRI fund ranges in Europe with active equity, fixed income, money market and asset allocation solutions, as well as passive equity and bond portfolios and impact investing. It also sells active ownership services including proxy voting and engagement, and will now extend voting to its global share portfolio.
Candriam says its SRI investment team is one of the largest in Europe with 35 fund managers and nine dedicated SRI analysts. The team is led by Brussels-based Isabelle Cabie, Global Head of Sustainable & Responsible Investments.
Candriam has also carried out a survey of 153 financial advisors in funds distribution companies in eight European markets to gauge demand for SRI funds. It found that while more than half propose SRI funds on their distribution platforms, less than 50% is familiar with what ESG criteria represent.
Support for ESG as a value-adding concept is relatively high across European funds distributors (61%), but this is clearly divided across markets. Support is strongest in France (70%), The Netherlands (81%) and Switzerland (81%), and lower in Italy (50%), Spain (45%) and the UK (38%).
Interestingly, funds distributors told Candriam that the biggest barrier to them proposing SRI funds in their range was ‘insufficient demand’ (58%). A slightly lower number (28%) said there was not enough fund product to do so, while 26% said there was a lack of information and quality publications to promote SRI.
The manager is setting up the Candriam Academy to promote related information and research to financial advisors.
Relatively few distributors (8%) thought SRI fund performance was an issue, or that cost (9%) was a problem.