NETHERLANDS - Stichting Pensioenfonds ABP, Europe's largest pension fund, has bought a 10%-15% stake in socially responsible investing investment research and advisory firm Innovest Strategic Value Advisors for an undisclosed sum.
The companies declined to disclose the value of the transaction, though Matthew Kiernan, Innovest's founder and managing director said in a telephone interview that the figure is insignificant in terms of ABP's overall size. He was not able to give a precise figure for the size of the stake, but gave a "ballpark" figure of 10%-15%.
"For us, this represents a strategic investment in knowledge capital in an area which we believe to be one of the most critical factors driving the future of fiduciary investment," said Jean Frijns, chief investment officer at ABP. ABP is the Dutch civil service fund.
Also as part of the deal, State Street Global Alliance, a joint venture between State Street Global Advisors and ABP, is to take a small undisclosed stake in Innovest.
"There is a growing body of evidence that companies which manage environmental, social and governance risks most effectively tend to deliver better risk-adjusted financial performance than their industry peers," Frijns added.
"Moreover, all three of these sets of issues are likely to have an even greater impact on companies' competitiveness and financial performance in future. As prudent fiduciaries, therefore, we want to have a "window" on leading-edge expertise in this area,” said Frijns.
“Innovest has consistently been regarded as one of the world's best, and after eighteen months of working together, they have become a logical investment partner for ABP."
Kiernan said ABP suggested that the move and that the Dutch fund was "voting with its wallet" by taking the relationship further. He added that ABP is making a calculated bet on the future of investing, saying that the kind of investment service Innovest provides is set to join the mainstream. He said the investment represents a significant vote of confidence his firm.
The moves follow Innovest and ABP subsidiary Loyalis Financial Services' launch of a 150 million dollar global sustainability fund based on its proprietary research platform.
ABP has around 135.0 billion euros in assets while Innovest, chaired by former TIAA-CREF chief investment officer Jim Martin, has around 800 million dollars under sub-advisory relationships and around 25 clients in Europe.