Sander van Eijkern, new chief executive officer (CEO) of Sustainable Asset Management (SAM), has moved more than just his home from the Netherlands to Switzerland after taking the top Zurich-based SRI job following eight years as managing director of Robeco Alternative Investments, part of SAM’s parent group, in Rotterdam. He is also overseeing the transfer of Robeco’s clean-tech and sustainability team, whose clients include the UK Environment Agency pension fund, from Rotterdam to Zurich to create a single centre of expertise for the group’s sustainability businesses within SAM: “What we want to do in terms of product is to expand where we think we can add value and we think this will be easier bringing the entities together.” The SAM chief’s background is instructive as to what product areas could be pursued. He says: “At SAM we will look at how we can apply our expertise in sustainability to the fixed income asset class and aim to further build, depending on client demand, in themed investments. A lot of this, of course, depends on the market outlook – retail investors are shell-shocked and institutional investors have taken amarket pause – but we will certainly expand the product range.” A macro economist by education, Van Eijkern joined Robeco’s fixed income business in 1989 before heading it between 1992-2000. In 2000, he switched to head up the firm’s alternatives division, building a hedge fund-of-funds and managed futures business as well as overseeing the implementation of a private equity fund-of-funds business. In 2004, he managed the introduction of Robeco’s sustainable private equity fund-of-funds, a hybrid that allocates to themes such as water, waste management and renewables as well as mainstream private equity funds that sign up to guidelines for responsible entrepreneurship created in tandem with Rabobank, Robeco’s AAA-rated parent group. Rabobank also owns Swiss-based Bank Sarasin, which acts as its international private bank and runs sustainability funds through its Basel office and via Sarasin & Partners, a London-based subsidiary. Robeco later launched a pure clean tech private equity fund and is currently fundraising for a third responsible private equity fund, which builds on the entrepreneurship guidelines.
Van Eijkern remains a member of the Robeco management board with responsibilities for private equity, hedge funds and sustainability and was already a board member at SAM before assuming the CEO slot on January 1. SAM founder and chief executive, Reto Ringger announced in September last year that he would leave the company at the end of February 2009 and was followed by Christian Werner, SAM’s former chief investment officer. Neither has yet to resurface, although both are believed to be staying in the field of investment sustainability. Van Eijkern says his board experience at SAM and private equity sustainability knowledge will ensure continuity, and says he is no stranger at taking businesses from the founder owner stage to a second generation of management. Robeco bought its 64% stake in SAM in December 2006 for a price tag believed to be in the region of SFr60-80m (€37-50m). The buy-out left 36% of the group held by SAM’s management and employees, a figure that is likely to have changed as top staff have left. SAM currently advises on assets of more than SFr14bn (€9.3bn), for retail private and institutional investors and has enjoyed strong growth in recent years.
Asked whether Robeco could make further acquisitions along the lines of the SAM deal in order to grow the Swiss business, Van Eijkern says: “For sales we can already leverage on Robeco’s presence in most major markets. If there is an interesting way to expand SAM’s operations by means of acquisition that’s always a possibility but we’re based really on organic growth. In terms of staffing, our team is pretty complete. We see some competitors cutting back on sustainability teams but we won’t be doing that.”Robeco has been vocal in its support of responsible investment (RI). A report issued last year by the Dutch fund manager and Booz & Company, the management consultancy, said RI would be a mainstream part of the asset management market by 2015, with assets of between 15-20% of the global total and total revenues reaching $50bn per annum within the same timeframe.
“We see some competitors cutting back on sustainability teams but we won’t be doing that.”
Van Eijkern believes there are three major perspectives that support this. The first, he says, is the analysis of sustainability factors within companies: “There has been a quite remarkable shift in the attitude of businesses, which was initially driven by corporate governance concerns but is now seen as a source of competitive advantage. Corporates are increasingly thinking about the long-term effect of social and environmental issues in order to mitigate risk and seize opportunities. At SAM I think our edge is that we translate our sustainability foresight and rigorous financial analysis into the selection of companies. This feeds into our co-operation with Dow Jones Indexes and STOXX for licensing of the Dow Jones Sustainable World Indexes (DJSI), which have had a fairly successful 2008 and now cover products with close to €5bn euros in assets. Last year, we saw the launch of the first futures based on the DJSI, the first related mutual funds in the US, a Korea index and we will soon launch an Asia Pacific index. It’s really a growth area.” The second trend, he says, is the shift by
investors: “We see a remarkable sign up to the United Nations Principles for Responsible Investment (UNPRI) but many now have to make the transition from signing up to practice and investment policy. Consultants are also increasingly rating managers on how they go about their ESG processes. And this is not just for traditional asset classes because we also see private equity buyout firms signing up to related standards.” The third aspect, he says, is the outfall of the financial crisis:“At the moment, the world economy is seriously depressed, which is also having a negative impact on sustainability investment. However, the underlying fundamentals of climate change, energy security and the increasing scarcity of natural resources haven’t changed. They are long-term trends and when the economy turns around these factors will come into play strongly through government stimulus packages, especially in infrastructure.”