Sarasin to re-tender for climate mandate as Bristol University divests fossil fuels

Long-term incumbent fund manager Sarasin & Partners says it plans to re-tender for a climate change-aware mandate at Bristol University as the academic institution seeks to divest from fossil fuels.

Bristol University in western England became the latest to join the fossil fuel divestment campaign which has seen a reported 43 UK universities, representing £10.7bn in assets, divest.

As part of the push it said it was tendering for a new fund manager for its £60m endowment.

“Following a review of the University’s Endowment Investment Policy, the University of Bristol has decided to seek tenders from specialist managers for the management of its endowment portfolio which has a value of approximately £60m,” it said in a tender document. New managers – with experience running charity money – would have to invest “in line with best practice in terms of corporate governance”.

That has put Sarasin, the London-based specialist with £14.4bn under management that is 54% owned by Bank J. Safra Sarasin, under scrutiny. It has been running the assets since the early 2000s.

But Sarasin’s Head of Charities Richard Maitland told RI that the firm hopes to retain the mandate after the forthcoming review.

A feature of the manager selection process is that Fossil Free Bristol will be involved in the selection of the fund manager once the field has been whittled down to three.With an estimated value of £1.75m the new climate-sensitive mandate is for five-years with an option to extend for another five years. The University did not comment on whether it is using investment consultants for selection.

The University’s endowment has been subject to two divestment proposals in consecutive years driven by the same student-led divestment campaign that has seen a protester at King’s College in London go on hunger strike.

Bristol University had sought to respond to students’ concerns by voting to explore the creation of a new fund, the Sarasin Climate Active Endowment Fund in January 2016. But delays with the fund’s launch due to “legal and regulatory changes” led to a decision by the University to further revise its Endowment Fund Investment Policy.

As an interim measure the University has also moved £3m (5%) of its endowment into an existing ethically filtered fund – which the University would not identify.

Sarasin’s Climate Active Endowment Fund is awaiting approval from the Charity Commission and Financial Conduct Authority and should be launched June/July 2017.

The deadline for applications is April 7 and the contract award date for the mandate has been set for June.