SRI funds house Trillium acquired by Australia’s Perpetual for $36m

$3bn Boston-based firm was founded by industry pioneer Joan Bavaria

Trillium Asset Management, the Boston-based firm started by the “Founding Mother” of the SRI movement, Joan Bavaria, is to be acquired by Australian financial group Perpetual for US$36m (A$54m, €32.5m).

Bavaria, a key figure in the growth of socially responsible investment in the US who died in 2008, founded Trillium in 1982 and was Founding Co-Chair of sustainability advocacy group Ceres.

Trillium now manages around $3bn in assets. 

The planned acquisition is designed to bring Trillium’s ESG products, which covers US equity and fixed income and global equity investments, to a broader investor base in Australia with further ambitions to “expand into new markets across the Asia Pacific, Middle East and Europe”. 

The late Joan Bavaria, founder of Trillium and 'mother' of SRIThe late Joan Bavaria, founder of Trillium and 'mother' of SRI

Following the deal, Trillium will continue to operate under its brand with no changes to its “team, investment process, or advocacy initiatives”, the press release states.

Over the last several years there has been a spate of ESG houses being bought up by larger players.

In 2014, Trillium itself acquired environmental investment boutique Portfolio 21 – with the latter’s John Streur going on to become CEO of Calvert – which was in turn acquired by Eaton Vance in 2016.

This was followed by London-based sustainable investment specialist Impax Asset Management Group, part owned by BNP Paribas Asset Management, buying US fund manager Pax World Management in 2018.

In the same year, US asset management giant Federated Investors also acquired a majority stake in Hermes Investment Management from the BT Pension Scheme.

ASX-listed Perpetual joined the UN-supported Principles for Responsible Investment (PRI) in 2009.

Its website states that the deal, which will see Perpetual acquire will acquire 100% of Trillium, “establishes a US footprint for Perpetual and increases exposure to the fast growth ESG sector”.

"This partnership will enable us to continue to be at the forefront and to push the envelope on impact" – Matthew Patsky

According to its July 2018 to June 2019 voting record its investment arm, Perpetual Investment, voted against the climate change transition plan proposal at Anglo-Australian miner Rio Tinto.

It also opposed two climate change proposals filed at Australian coal giant Whitehaven. One asked the company about how it plans to align its strategy and capital expenditure with the Paris climate agreement. 

On social issues Perpetual also voted down a resolution at Australian retail giant Woolworths regarding human and labour right abuses. 

“With ESG investing rapidly gaining momentum among individual and institutional investors alike, this partnership will enable us to continue to be at the forefront and to push the envelope on impact,” said Matthew Patsky, CEO of Trillium. 

“This transaction will provide us with additional resources that we can use to better meet the evolving expectations of our clients, shareholders, employees and the broader community.”

Trillium, a prolific filer of ESG shareholder proposals, currently has resolutions filed at several US companies, including one at Facebook requesting that the scandal hit social media platform separate Mark Zuckerberg’s CEO and Chair roles. 

Staying in Australia, another prolific filer of ESG resolutions, the Australasian Centre for Corporate Responsibility (ACCR) has lodged three shareholder resolutions at Santos, calling on the ASX-listed oil and gas company to review its direct and indirect lobbying activities and set and disclose emissions reduction targets, covering scope 1,2 and 3.

Santos’ annual meeting is on 3 April. 

Last year, Santos denied shareholders the vote on several climate proposals via a technicality.