Faith in sustainability and promising returns spurred Dutch asset manager Robeco to take a majority stake in Swiss-based Sustainable Asset Management Group (SAM) and with the aim of creating a global number one platform for sustainability investments.

Robeco's chief executive officer George Möller said the main driver behind the move was the scarcity of natural resources and the desire to make them more efficient by investing in clean technologies.

He says: "We think that SRI with its exclusion rules is a bit on the soft side, whereas sustainable also covers the hard side such as clean technologies. Resources such as water and energy are limited and often affected by political instability. To make resources more efficient, by creating new forms of energy and cutting pollution, we expect a breakthrough in clean technologies. Asset management money can flow very quickly into these developments. We already made a start with the Clean Technology Private Equity Funds 1 and 2."

Robeco was attracted to SAM as it is one of the world's earliest leading asset managers for sustainable investments and possesses widely recognised water and energy funds. On top of that, its creation of the Dow Jones Sustainability Indexes (DJSI) - a joint initiative with Dow Jones Indexes that helps analyse companies and collect information on their sustainability - put it in a unique position. And there are few competitors.

Möller says: "I think it's a perfect fit because SAM will bring in leading research, while we have the power to distribute with Rabobank behind us, as well as a global presence. And demand for sustainable investments is constantly growing."

He is convinced that sustainability will give Robeco out-performance and higher returns. This is in contrast to the soft SRI approach where a feel-good factor makes up for lesser returns following from multiple company exclusion. He says that according to the DJSI, the companies chosen by SAM, sustainable companies are outperforming non-sustainable ones. Möller claims that focusing on companies in a clean tech environment would result in even greater out-performance and predicts an annual growth of 20-25% for their joint platform. SAM alone - with CHF3.6bn (€2.2bn) assets under management and €4bn assets under advice adding up to a total of €6.2bn - has been growing in assets by 45% since 2002.

Möller says: "Pension funds look at two levels with regards to sustainable investments. Trustees will probably go for sustainable, minimum exclusion rules, while managers will also include investments in clean technology in order to obtain higher returns. As a reverse effect - even without minimum exclusions - it will cost the airlines money and performance if the EU forces them to curb emissions. Consequently, if companies don't invest in clean technologies and these become inevitable, they can only become losers."

He predicts a paradigm shift, as the winners are likely to be unknown companies and private equity investors, because it is difficult for big companies to change completely enough. He explains that it would be difficult for oil companies, for example, to invest heavily in new energies as they see it as operating against their main business investment base.

Möller says that people's focus on short-term results is the reason why sustainability is still being linked with a lesser returns.

He also believes that investment areas like reforestation will take off when environmental issues become a concern, although they are not new. Robeco is already looking at new themes and markets in the US, Europe and emerging markets. The asset manager also thinks of a long-short positions strategy that allows long positions on the sustainable side and short ones on the other.

In the deal, Robeco takes a 64% stake in SAM Group and with 36% held by SAM Group's management and employees. SAM is aimed at retail and private investors as well as institutional investors.

And as a result of the transaction, Robeco will move some of its activities to Zürich. It also wants to create a substantial sales force globally as well as a structured team in Rotterdam. The asset manager also aims to reposition SAM in the US with the help of the Dow Jones connection, as SAM is currently restricted to Europe, while Robeco is already a presence in the US. But the name SAM will be kept, as it is highly recognisable and seen as a specialist manager in the area. Its management will also remain unchanged under founder and chief executive Rero Ringger.