There has been a significant increase in the attention being paid to the stewardship activity of asset managers in the UK, according to the Investment Association’s Annual Survey of Asset Management in the UK 2014-2015. The survey is based on responses from 72 Investment Association member firms that collectively manage £4.6trn of UK assets under management.
It finds increased focus on stewardship is being driven as much by asset managers as by clients, and that it is seen as a key driver for investment returns.
Human resource dedicated to engagement has increased by 19% in the year to 30 September 2014, and over 80% of this increase was represented by portfolio managers and analysts, the report finds. It says this shows that stewardship is increasingly becoming integrated into the investment process rather than being treated as a standalone activity. Three-quarters of managers who took part in the survey said that all or some of their third party client mandates referred to stewardship.Further, 53% of respondents said some of the assets they managed were subject to ESG requirements.
The report also analysed concern among asset owners for ESG investing, and found it was “far less marked” outside of some of the largest pension and sovereign wealth funds.
However, the report notes that there is an emergence of interest in ESG requirements in defined contribution default funds, and that as younger savers invest in pensions the pressure on employers to consider ESG considerations when choosing a default fund for their pension may increase.
The report finds that total asset under managements in ESG funds was £10bn at the end of 2014, with net retail sales of ESG funds standing at £460m.
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