UBS says its new sustainable fund strategy could suit institutions

Swiss banking giant UBS says its new sustainable fund offering targeted at private investors could be marketed to institutional investors if it gets to scale.

UBS launched the strategy six months ago in its home market and is rolling it out internationally with a launch due in the UK later this month.

Executives said the offering, which features a corporate engagement section in partnership with Hermes and a fixed income tie-up with the World Bank, has attracted $2bn in assets globally since launch.

The product is based on UBS Global Wealth Management’s sustainable investing framework, UBS said. It has three risk profiles (yield, balance and growth) and is available in numerous currencies.

Asked by Responsible Investor whether it could be attractive to institutions, James Purcell, Head of Alternative and Sustainable Investments at UBS Wealth Management, said: “Yes, I guess so.” There was “no reason, inherently, that it couldn’t be marketed to institutions”. And he pointed out that it has already had take up from investors like family offices, charities and foundations.

His colleague Eva Lindholm, Head of Wealth Management in the UK, added: “We just need the scale.”

The bank is making a push into sustainable investments, exemplified by the hires of senior ESG figures like Michael Baldinger and Christopher Greenwald (ex-RobecoSAM) and James Gifford and Valeria Piani (ex-PRI) to name a few.Insiders say the move has the full backing of UBS Chairman Axel Weber, the former President of the Deutsche Bundesbank and board member at the European Central Bank.

“We just need the scale.”

CEO Sergio Ermotti has been vocal about stressing the bank’s commitment to sustainability and UBS has committed to investing at least $5bn of private client assets to Sustainable Development Goal-related impact investing

Gifford, the founding Executive Director of the Principles for Responsible Investment (PRI), says the sector is at a “tipping point where institutional grade investments are being made at scale to more investors than ever across the world”.

Writing in a guide to sustainable investing handed out at a media launch today, Gifford, who is Head of Impact Investing, Chief Investment Office at UBS Wealth Management, wrote of a “golden opportunity” to engage people in investing sustainably.

In its annual report released in April, UBS said that its impact investments grew 28% from 2016 – 2017, from CHF2.5bn (€2.1bn) to CHF3.2bn (€2.7bn). Total sustainable investments rose by 13% over the same period.