GES, the Stockholm-based ESG research house, is merging with Governance for Owners’ five-strong Stewardship Services arm, which is being split off from GO in a revamp that has also seen the departure of CEO Stephen Cohen.
Cohen, a seasoned asset management executive who joined GO in 2012 to take over when co-founder Peter Butler retired, has been succeeded by co-founder Steve Brown.
The rationale is that GO will now solely focus on investment (it has around $800m under management) – meaning Cohen’s role was effectively redundant in a simplified structure. Brown told RI that the departure was amicable and that the re-focusing had been greeted positively by clients. The merged entity will operate under the GES name with support on Japanese engagements from Governance for Owners’ Tokyo operations. The aim is to create a global leader in ESG engagement, research and voting.
The deal will also see Butler become a Senior Advisor to GES. Terms of the deal weren’t disclosed.
Magnus Furugård, President and Managing Director of GES, said: “The combined firm will create acomprehensive offering to cover all aspects of engagement, including proxy voting.”
Brown added: “The combined business will be well placed to focus on its core strengths and grow independently from GO, which will now focus on investment business.”
Governance for Owners was set up by Butler and Brown 10 years ago, building on their work at Hermes Focus Asset Management. Its shareholders include Railpen and CalPERS, which have representatives on the board.
GO has some heavyweight backing. Corporate governance pioneer Bob Monks is a senior advisor, as is former CalPERS CEO James Burton. It is chaired by Bill Crist, the Emeritus Professor of Economics at California State University who was president and chairman at CalPERS from 1992-2003.
According to Governance for Owners Group LLC’s most recent annual accounts (for the year ended December 2012), turnover was down to £6.1m from £7m. Profit almost halved to £609,712 from £1.15m.
GES, which has €750bn worth of assets under advice, also has an existing partnership with Germany-based Oekom Research.