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RI will reach 15-20% of global asset management market: fund manager report

Robeco chief says market undergoing ‘paradigm shift’.

Responsible investment (RI) will be a mainstream part of the asset management market by 2015, running assets of between 15-20% of the global total, according to a report by Robeco, the Dutch fund manager and Booz & Company, the management consultancy. The report says total revenues for the RI sector could reach $50bn per annum within the same timeframe, meaning that RI funds become a major source of income for asset managers. It said that factors driving the growth of the RI market included increased social awareness, greater media attention and external pressure on investors, increasing prices of energy and raw materials and changing legislation such as mandatory CO2 reductions. Other contributory growth factors, it said, included the increasingly established track record for RI performance as well as further technological innovations.
George Möller, the respected chief executive officer of Robeco, said: “There is a paradigm shift in the market. As the RI market continues to grow, Robeco’s increasing adoption of RI throughout its fund portfolio reflects our view of the significance of this shift and will position us for a major change in the investment industry landscape over the next few years.”The report said that Europe – particularly the UK and Switzerland – would drive much of the RI growth with the institutional market growing faster than retail fund sales. As a result, the report claims that shape of the asset management landscape will change considerably over the next few years: “Today, the RI market is heavily fragmented. Larger players have not yet actively pursued RI or are only just beginning to position themselves in the market. By 2015, niche players are either likely to be taken over by global players or will grow themselves to become sizeable specialists; the current leading players might become laggards if they do not follow this trend.” Charles Teschner, partner of Booz & Company, said: “RI is becoming more and more significant in the investment world, with raised social awareness and improved performance factors, as well as the fact that pension funds and other institutional investors are increasingly required to disclose their policies and positions. In December 2006, Robeco bought a 64% stake in SAM Group, the Swiss SRI manager and sustainability index specialist.
Link to the report