Marsham Investment Management scooped the 'Fixed income manager of the year' award after impressing judges with its $260 million transition-focused bond strategy.
Launched in 2020 with US dollar- and Euro-denominated funds, the Marsham Transitional Issuers strategy added a sterling fund in 2021. In 2022, all three funds outperformed their aggregate bond market benchmarks by at least 1.8 percentage points.
Marsham IM co-founder and portfolio manager Maria Lozovik told Environmental Finance that a "unique" feature of the strategy is the use of artificial intelligence tools – in particular, provided by Sevva – to bring greater standardisation to the sustainable investing universe.
"Our deployment of AI and future technologies empowers our fund managers with greater oversight of the historical market trends, with enhanced capacity to make informed predictions concerning the future vitality of issuers [based on ESG data]," she said.
Marsham emphasised that investing in transitional issuers is "quite distinct" from investing in green bonds, with a focus on a credible company-wide sustainable transition rather than specific green projects.
Indeed, Lozovik said that the strategy does not invest in labelled sustainable bonds – arguing they are "superficial" as transition instruments. She said the Transitional Issuers strategy is "fundamentally different" in valuing "accountability and transparency above projected impact or corporate mission statements".
"A [transitional] issuer is a company already in motion, already moving towards green practices – proving through actions rather than words, that their intent is to become greener, fairer, and more transparent in their operational practices," she said. "They see economic incentives in such transition, including being ahead of the competition and increasing market share in the future."
The transitional approach often results in a focus on "old economy" issuers – including miners, energy, and industrial firms – which have fallen out of favour among sustainably aware investors. But, Lozovik added that transitional strategies have been gaining more traction among investors – a trend she expects to "intensify" in the future.
Key Facts: Marsham Transitional Issuer Funds
|AUM||$132 million||€78 million ($85 million)||£36 million ($46 million)|
|Launch||September 2020||September 2020||July 2021|
|Largest Geographies||US (42%); Netherlands (16%); France (18%)||Netherlands (24%); France (16%); Germany (13%)||UK (71%); France (17%); US (8%)|