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Royal London confirms acquisition of ESG pioneer The Co-operative Asset Management

Leading voice in responsible investment acquired for £219m

(Updates earlier version of story with comment from RLAM)
It’s been confirmed that The Co-operative Asset Management (TCAM), which in 2002 became the first UK fund management house to disclose how it votes at company annual meetings, is to be sold to Royal London, the mutually owned life and asset management firm.
All the firm’s 170 staff, including figures such as Head of Responsible Investing Niall O’Shea and long-time sustainable fund managers like Mike Fox and Linda Desforges, will transfer to Royal London as part of a broader transaction valued at £219m (€256m), a Co-op spokesman said.
But Royal London said it was too early to comment on teams and individuals and there would be a “period of consultation” to determine how the integration will work.
Under the deal, Royal London, the UK’s largest mutual life and pensions company will buy Co-operative Insurance Ltd. and TCAM, the £20bn asset manager which takes an integrated approach to environmental, social and governance (ESG) issues. The deal had been in the pipeline since the companies signed a ‘heads of terms’ agreement in July 2011, as reported by Responsible Investor at the time.

TCAM – prominent in investor campaigns on tar sands at BP and Shell – will be merged with UN Principles forResponsible Investment signatory Royal London Asset
Management (RLAM), creating an entity with combined assets under management of around £70bn.

Further details of this would be available “in due course” the firms said.
Among the funds that would transfer over include TCAM’s £230.26m Sustainable Diversified Trust, the £336.69m Sustainable Leaders Trust and the £88.77m Sustainable World Trust.
Royal London said they would also be subject to a consultation, although TCAM’s SRI/ESG funds were expected to remain separate.
Royal London says the deal brings “synergies” to boost profits with Chief Executive Phil Loney adding it “brings together two like minded organisations”. He said: “Our asset management offerings will also be enhanced, particularly in the area of socially responsible funds.”
The Co-operative said the move was the best outcome for its policyholders. Royal London is being advised by Macquarie Capital.

RI reported in January that TCAM had excluded Barclays from its investments over the Libor interest rate-rigging scandal and other issues such as mis-selling – and warned that other banks may also be dropped.
Last month RLAM said that its Head of Equities Jane Coffey left “to pursue other interests”.