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Former top Deutsche Asset Management execs Parker, Abele in ESG partnership

Sustainable Insight Capital Management in link with Auriel Investors

Former Deutsche Asset Management CEO Kevin Parker has teamed up with Larry Abele, DeAM’s former Global Head of Quantitative Strategies and Portfolio Engineering, in a new partnership between their two firms.

Parker’s Sustainable Insight Capital Management (SICM), which was founded in 2011 as a global long only equities manager, has signed a partnership with Abele’s Auriel Investors, which dates back to 2004 and claims to be the first hedge fund to integrate ESG.

The partnership is backed by the Capricorn Investment Group of eBay billionaire Jeff Skoll.

A statement said the new partnership would “manage custom high-impact sustainable equity strategies grounded in an institutional standard of portfolio construction and design”. Terms of the deal weren’t disclosed.

Under the deal, they two firms will “integrate each manager’s unique alpha capabilities and sustainable expertise to offer bespoke, impact-heavy strategies”.

The portfolios will be managed against a benchmark (custom or otherwise) with a choice of ESG alpha overlays, creating an “all-new class of ESG solutions” that will be “scalable, commercial and flexible”.Bill Orum, a Capricorn partner who is a director of SICM, said the tie-up would “set a new standard for what is expected in sustainable equity investing”.

“A new standard for what is expected in sustainable equity investing”

Parker added: “We look forward to working with Larry and his team to offer a suite of bespoke equities strategies, especially in Europe where Auriel has been operating in the institutional market for many years.”

Seven-strong SICM commenced operations in February 2013 with partners The Kresge Foundation and Capricorn. RI ran an interview with Parker at the launch, available here.

Auriel’s stated approach is to take capital from ‘problem’ companies (going short or underweight) and giving the capital to ‘solution’ companies (going long or overweight).

It says: “We are helping to shift the cost of capital in the direction of positive change. This is the invisible hand of capitalism at work.”

The Deutsche Asset Management name disappeared in 2017 as parent Deutsche Bank introduced DWS as its global fund management brand.