SNS Asset Management
Known as a specialist in socially responsible investing, active manager SNS Asset Management positions itself as a one-stop shop for SRI. Unlike some players operating within the sustainable investment arena that focus solely on one aspect such as company screening, SNS has brought all activities related to asset management under one roof, from research to administration.With e14.4 bn in total assets under management worldwide, SNS is ranked within the top10 professional investment managers in Holland. Pensions assets make up 12.8% of its business, with insurance companies making up the bulk at 44.4%. Bank business accounts for 14.8% and the rest is in mutual funds.
But SRI only makes up a proportion of investment business at SNS. "Next to our SRI specialists we also have a very good fixed income team," says managing director Hans Molenaar. Fixed income makes up the majority of assets managed, accounting for 71%.
SNS has its own particular approach to SRI, employing what is termed the ‘People, Planet, Profit' principle. "We are one of the few asset managers in the world that really integrate the triple P approach within research," says Molenaar. Other managers making asset decisions along SRI lines tend to keep their economic research separate from environmental, social and governance (ESG) choices.
"We have integrated the profit side of the variable at an early stage," he says. In its SRI, investment is normally measured against traditional benchmarks, meaning that the fact that it is invested on an SRI basis will not weigh on returns, he adds.
"With our integrated approach we analyse companies on a broader range of factors," he says, adding that this broader view enables SNS to take strategic views on stocks. The firm can implement different sustainable investment types on behalf of clients. Apart from managing segregated portfolios for institutional clients, SNS also runs a sustainable equity fund called ‘Sense Fund'. This takes a best-in-class approach to SRI. On the other hand, the firm also manages the ASN Equity Fund, which uses ethical exclusion criteria along with stock-picking.The incoming FTK framework is seen expanding business at SNS. Demand from pension funds will increase as they come under pressure to inject a higher dose of professionalism into their investment activities. "We are able to help them become more professional," says Molenaar.
Although fixed income makes up such a large part of its business, the SRI side is witnessing the fastest business growth in terms of numbers of clients, and this is the way the firm wants it to be, says Molenaar. At the moment, all SNS clients are Dutch.
"The way we do SRI is not ‘me too'", says Molenaar. "It is in our genes."
Within institutional investment, the visible trend towards greater diversification of assets is likely to go further, he predicts. "We see greater demand for SRI products, and we have seen this happening over the last year and a half, especially from larger institutions around the world."
The latest example is France's Fonds de Réserve pour les Retraites which has directed e600m into SRI, and more recently, the AP funds in Sweden and French ERAFP.