Kiernan’s Inflection Point ties with alternatives manager for sustainable hedge fund venture

Inflection Point Capital Management (IPCM), the ESG fund management boutique set up by Matthew Kiernan, the former co-founder of Innovest, has formalised a partnership with Auriel Capital, a London-based alternatives manager, by setting up a joint sustainability-themed hedge fund called Inflection Point Partners LLP (IPP). London-based IPP will run an absolute return overlay strategy for European equities integrating traditional financial research together with sustainability analysis. Earlier this year, Auriel kicked off a partnership with ICPM for proprietary sustainability research for use in Auriel’s absolute funds. The new entity Inflection Point Partners will be the formal vehicle for the research for the Sustainable Absolute Return Fund, which was initially launched in June 2007 as the Auriel European Equity Fund. Andy White, former managing director of research at Innovest, and Head of Sustainability Research for IPP, said: “Our process integrates – from the very outset – both traditional financial and sustainability research and analysis. We look carefully at environmental and social considerations, bringing an entirely new framework to the sustainability arena looking at factors such as corporateagility, culture, board skills, innovation capabilities, and exposure to emerging global megatrends.” The fund aims to generate 3-6% net return over cash with 6-8% volatility, while maintaining low correlation to both global equities and major asset class indices. Larry Abele, Chief Executive at Auriel Capital, said: “Research into intangible valuation is often overlooked or viewed as too slow to be material. We have found that sector specific research into the material issues facing Europe’s major corporations adds significant value. We are excited to be working with IPCM to enhance our fund with new unique sources of alpha.” In 2009, Auriel Capital hired Adam Seitchik, former chief investment officer of Boston-based SRI house, Trillium Asset Management, as a managing director for an initial push into sustainable hedge funds. Seitchik left in May 2011 to launch the Sustainable Investment Research Center, which trains asset owners and asset managers on how to integrate sustainability into their investment processes.