Metzler Asset Management, the funds arm of the Frankfurt-based private bank that was founded in 1674, has formed a Sustainable Investment Office in a ramping up of its ESG aspirations.
The Office will be co-headed by Jan Rabe, the former Head of ESG Research at Deutsche Bank, and Daniel Sailer, ex-Executive Director of ESG Research at MSCI, who have recently joined.
RI reported in June that Sailer, who spent close to a decade at MSCI, was joining Metzler.
Dr. Axel Hesse, who was Head of ESG Integration at Metzler AM, left by mutual agreement as of March this year to concentrate on his own firm, SD-M GmbH.
Through the new unit, Metzler AM will also provide ESG reporting to all clients of its €77.9bn portfolio – which includes both assets under administration and management – at no additional cost.
Metzler AM provides both asset management and fund custody services. Under the so-called German “Master KVG” model, the custodian for institutional portfolios is required to be a separate legal entity which provides risk management and administrative services.
Thus, multiple strategies across asset classes can be structured as a single legal entity with the different asset managers overseen by a Master KVG.
Institutional investors therefore do not have to rely on – for example – smaller boutiques with expertise in specific asset classes but limited capabilities to administer investment vehicles.Metzler AM provides both these services. Out of the €77.9bn of assets it administers, it provides both administration and asset management services for €48.7bn assets.
Previously, ESG reporting services was provided to funds under its administration and management as an additional paid-for service.
Sailer said: “Metzler AM was one of the first Master KVGs to provide ESG reporting services back in 2017. We now see that ESG reporting is becoming a market standard and investors are not willing to pay for this service due to the expectation that it will be bundled with standard financial reporting alongside risk reporting and so on.”
Metzler AM – which in 2012 was one of the first German banks to sign up to the Principles for Responsible Investment (PRI) – has an internal Sustainable Investment Board on which its eight departments are represented including Sales, Equity Management and Fixed Income. The Board will play an active role in providing feedback to the Sustainable Investment Office and consultation with regards to specific asset classes or themes.
See here for RI’s 2016 interview with Mezler’s CIO Rainer Matthes.