SRI firm Calvert removes Legg Mason affiliate Martin Currie from $235m sub-advisory role

Assets will now be run in-house by equities chief Trunow

Calvert Investment Management, the US socially responsible investment firm with $13.4bn (€12.2bn) under management, has terminated Martin Currie, the UK-based active equity specialist affiliated with fund giant Legg Mason, from a $235m sub-advisory role.

The board of the Calvert World Values Fund has removed the Edinburgh-based firm as investment subadvisor at its International Equity Fund, according to a filing at the Securities and Exchange Commission (SEC). Calvert itself will now have responsibility for the “day-to-day management” of all the assets.

Natalie Trunow, Calvert’s equities investment chief, will now be the sole portfolio manager of the fund. “All references to Martin Currie and its portfolio managers are deleted,” the filing
states. Calvert is itself part of the insurance mutual Ameritas Life Insurance Corp. of Lincoln, Nebraska.

A Calvert spokesperson said Martin Currie ran 65% of the portfolio, or around $235m. The decision to axe the firm was taken on March 4.

Bethesda, Maryland-based Calvert said the change would “provide better style-positioning and an improved risk/return profile, which will result in more consistent performance results”.

It added: “Benefits from this change include a reduction in expenses and full exposure to Calvert’s equity investment process which draws on four distinct sources of alpha—macro insights, quantitative analysis,fundamental company analysis, and Calvert’s ESG perspectives.”

It would also reduce the fund’s current growth bias and make it “more consistent” with its passive benchmark, the MSCI EAFE Global Investable Market Index. Martin Currie did not respond to requests for comment.

“Benefits from this change include a reduction in expenses”

In a letter to clients earlier this month, Calvert’s new CEO John Streur noted the firm has developed a set of principles for responsible investing and that it intends to extend its active share ownership activities through corporate engagement and “public policy development work”.

Streur, who officially took the reins of the firm as of January 1 this year, having joined from SRI firm Portfolio 21 to succeed Barbara Krumsiek, added: “We find that we have opportunities to strengthen the ties between our investment management activity and corporate engagement activity in ways that we believe will bring further benefits to our clients while advancing our mission as a responsible investor.”

Meanwhile, the firm has deleted New York-listed Whiting Petroleum from the Calvert Social Index as it “no longer meets the index’s standards for environment and workplace safety”.