A sustainable meeting of minds

Darren Sinden

Bridgewater’s chief operating officer Bryan Kreiter said of the new partnership that scalable, sustainable investing is a strategic priority for Bridgewater and its clients

Two of the best-known names in finance are coming together to a launch a new multi-asset fund management strategy in 2021.

Bridgewater Associates, the worlds largest and best-known hedge fund manager is partnering with France’s Lyxor Asset Management to create a new multi-asset strategy targeting the theme of sustainability and sustainable investing.

The new vehicle will aim to offer investors the opportunity to realise their financial and sustainable investment goals by using Bridgewater’s established “all-weather “ multi-asset framework to trade assets that are in line with the United Nations sustainable development goals.

Bridgewater which has more than $130 billion of assets under management or AUM will bring its research expertise to the fund’s asset allocation process and will select investments from within the public markets that meet the UN criteria.

Lyxor will bring its considerable experience in managing ESG assets to the partnership it currently has around $18.0 billion under management in the sector and it will manage the UCITs strategy which is necessary if the funds are to be marketed in Europe, where Bridgewater will act as a sub-advisor.

The UN mandate is made up of 17 interlinked objectives including, an end to poverty and hunger, the pursuit of good healthcare, well being and education, clean water and sanitation, reducing inequality and the creation of more sustainable communities and cities. The goals were laid down in 2015 with a 15-year target for achieving them

Bridgewater’s chief operating officer Bryan Kreiter said of the new partnership that “scalable, sustainable investing is a “strategic priority” for Bridgewater and its clients” and that “Using the same research process that we have developed over the last forty years, we have built a systematic process to engineer both the sustainability and financial characteristics of portfolios,”

Lyxor’s chief client officer Nathanael Benzaken commented that “Our clients’ appetite for sustainable investing has grown significantly in recent years, with investors setting goals that combine financial and sustainability outcomes. Lyxor’s culture of innovation and recognized ability to design transparent investment frameworks have helped us achieve client goals in this area”

The new initiative between Bridgewater and Lyxor is not the first asset management product to align itself with the UN’s sustainable development goals, for example, UK based M&G manages a positive impact fund with £133.26 of AUM which returned +17.92% between December 2019 and end November 2020.

Whilst Germany’s DWS has €703 million in its Invest SDG Global Equities fund, which generated returns of +16.96% between October 2019 and October 2020.

Those examples suggest that sustainable investing can pay dividends and can compete with less socially focused investment products.

Bridgewater and Lyxor’s products should be launched in March 2021 and whilst they probably won’t make much of impact initially the partnership does open up an intriguing mix of cultures between the two groups, and it will be fascinating to track how well the two firms work together on a common goal.

Read this next

Institutional FX

Euronext reports double-digit growth in FX volume

Pan-European exchange, Euronext has reported a 10 percent rebound in the average daily volume on its spot foreign exchange market. The ADV figure stood at $19.6 billion in January 2022, which is up from December’s $18 billion.

Digital Assets

Voyager subpoenas FTX’s inner circle over Alameda loan

Bankrupt crypto broker Voyager Digital, represented by law firm Kirkland & Ellis, is seeking court approval to subpoena Sam Bankman-Fried’s inner circle, as well as Alameda Research’s former executives.

Retail FX

AvaTrade seals sponsorship deal with F1’s Aston Martin team

Dublin-based forex broker AvaTrade today announced that it has concluded a sponsorship deal with Formula One’s Aston Martin Cognizant team that entails sponsorship rights and other marketing benefits.

Executive Moves

M4Markets onboards Invaxa CEO Marios Antoniou as COO

Seychelles-regulated brokerage firm M4Markets has appointed Marios Antoniou, who has a colorful career within the foreign exchange industry, in the capacity of its Chief Operations Officer.

Digital Assets

GK8 now allows clients to control their digital assets as they would their fiat

“As the institutional market is increasingly turning to self custody, our policy engine empowers them to automate transactions, approvals, and even crucial workflows, while providing the highest degree of security, consistency, governance and control.”

Digital Assets

Retail CBDCs in the UK: “Welcomed” by CryptoUK and R3, but “Dystopian” for ETC Group

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the BoE and HM Treasury.

Institutional FX

Centroid taps Iress API to provide retail brokers with real-time market data

“It has always been a challenge to have an efficient, elegant solution for market data and order execution for retail brokers, but with Iress we have found absolutely the right partner to add to our client offering.”

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”