15 June 2021
Renowned global equity portfolio manager Raphael Pitoun has brought his global and US ESG equity strategies to Trium Capital, the family office backed independent asset manager. Pitoun will manage the Trium Sustainable Innovators Global Equity Fund and the Trium Sustainable Innovators North American Equity Fund (successor funds to the CQS New City Global Equity Fund and the CQS New City North American Equity Fund respectively, following completion of a merger) as part of the Trium Sustainable Innovators Fund range. The Funds have a combined AUM of over USD 220m. Pitoun is joined by a team of analysts including Philip Gottschalk.
Both UCITS strategies target returns in line with the long-term earnings growth of invested companies, about 12-15% gross per year, across the cycle on a non-benchmarked basis. To achieve the investment objective, the strategies invest in concentrated portfolios of 20-30 companies listed in the OECD with a market cap in excess of $3bn, a strong track record and robust growth prospects.
Both strategies focus on customer-centric companies which Pitoun categorises as “innovation compounders”, as they constantly deliver new products and services in the context of a win-win relationship with their clients. Within the context of this analysis, the investment team seeks to identify ESG risks and opportunities that can affect the quality and predictability of economic performance in the long term.
The team combines deep dive analysis with continual company engagement. ESG analysis is incorporated into the entire investment process, including screening, research, monitoring and ownership, with a view to improving financial performance. Both Funds have received the LuxFLAG ESG Label, recognised for its high standards and rigorous assessment of applicant funds’ investment strategy and ESG integration into the investment process.
Both Trium Sustainable Innovators Global Equity and Trium Sustainable Innovators North American Equity are classified as Article 8 funds, as the strategy promotes environmental and social characteristics.
In fact, Pitoun’s investment universe has 88% less GHG Scope 1 and Scope 2 emissions than MSCI World.*
Both funds are available on Allfunds and other platforms from inception.
Portfolio Manager of the Trium Sustainable Innovators Fund range Raphael Pitoun comments: “Material exposure to new market opportunities related to ESG factors will play a growing role in the sustainability of business models over the long term. Within this paradigm, we believe constant innovation is key for companies to sustain their economic edge and outperform their competitors over the long term.
“We find innovation compounders in specific industries supported by highly diversified secular tailwinds. Typically, they hold a market leading position. To consistently commercialise their innovation, companies must have a clear business mission, appropriate corporate governance and incentives that specifically encourage innovation from the ground up.
“Such companies have consistently produced a flow of recurring innovation and sustainable profits derived from the intrinsic value the company brings to the customer – not from an opaque value chain or regulatory window. One dollar of profit is not equal to another. We believe it is paramount the interests between these companies and their stakeholders are harmoniously aligned.”
Co-head of Trium Donald Pepper says: “Attracting Raphael’s proven, high-calibre strategies to Trium demonstrates our commitment to finding the world’s most exceptional managers. Our experience and resources will support Raphael and his team in scaling up a diverse investor base. Both strategies have well-defined, valuation-driven repeatable processes that have performed through market cycles, while being particularly resilient in down markets.
Pepper believes ESG adoption is rapidly accelerating in the industry and investors need to prepare for a fundamental shift in long-term portfolio management.
“For example, the next phases of SFDR implementation, particularly taxonomy, may lead to a concentration of equity funds in a limited number of stocks and an increase in the cost of capital for companies poorly ranked in terms of ESG. As ‘Article 8’ designated funds, Raphael’s have the existing process to navigate clients through a changing environment, and the strategies’ early compliance demonstrates their commitment to sustainable investing.”
Trium is a signatory of the Principles for Responsible Investment and a supporter of the Paris Agreement. Trium’s fund range includes dedicated ESG products and adapted investment products to satisfy an investor’s specific ESG requirements. Trium launched the Trium ESG Emissions Impact Fund in 2019, an Equity Market Neutral strategy.
*Source: MSCI ESG