Sustainability will be the starting point for Quintet’s discretionary mandates, says James Purcell (photo), the new head of sustainable management at Quintet Group, in an interview with Investment Officer.
Purcell joined Quintet in March 2020 and is based in Switzerland, having previously worked for UBS. While acknowledging that many banks have been adding ESG factors to their processes. Purcell claims the fact that Quintet is a relatively late adopter can be turned into an advantage. ‘We don’t want to see ESG as an add-on, but as an evolution on which we can build further,’ he says.
Evolvement
Purcell quotes two concrete examples of the way in which Quintet wants to evolve. ‘Within three to six months, we want to offer sustainable management as a standard in all discretionary mandates. For our customers, there is also an opt-out option, if they wish to do so. However, we want to place sustainability at the core.’
‘Secondly, we also want to roll out CSR (corporate social responsibility) in more detail at group level,’ Purcell continues. ‘Most companies have sustainable investment and CSR in two different departments. But we want to ensure that both aspects complement each other. Everything we do must be responsible at group level and also radiate to investment management, and vice versa.’
Quintet plans to concentrate on ‘thematic opportunities, key technologies and services’, says Purcell. In more concrete terms? ‘Things such as green bonds, World Bank or Asian Development Bank debt securities, microfinance and the like can be perfect replacements for a classic portfolio. For example, World Bank bonds offer a higher yield than traditional government bonds, but are equally stable. In our opinion, an investment grade corporate bond portfolio can be filled entirely with green bonds, which means you no longer need conventional bonds.’
Sector initiatives
Quintet Group signed the UN PRI in 2019, although its various subsidiaries did so earlier. ‘We don’t want to sign too many such initiatives,’ explains Purcell. ‘For example, we are a member of Climate Action 100+, but we do not want to sign as many initiatives as possible just to attach our name to it. A team can put a lot of resources into reporting and the like so that your score on, for example, the PRI automatically improves, but you cannot use those resources anymore for your customer offering. So we want to be selective. Ultimately, we want to stay focused on the concrete results for our clients and keep the administrative burden under control.’
Purcell indicates that ESG and responsible corporate governance are priorities for Quintet’s strategic development. ‘We want to develop one team for Quintet. We already have people working on this in the Netherlands, Luxembourg and Switzerland and I would like to have six people on my team by the end of the year. Finally, we find it very important to work on projects that have a link between the financial and ‘real world’. For example, you can invest in financial projects that help plant more trees. I think that’s the beauty of the story.’