Allianz Global Investors can now offer an extensive thematic range, which was recently completed with a fund that invests in companies that offer solutions to various food challenges in our societies. Demand is expected to rise sharply by 2050.
Allianz Global Investors has a relatively complete range. It aims to be as closely aligned as possible with the 17 Sustainable Development Goals created by the United Nations in 2015. “As part of these products, we will never invest in companies with a negative impact on any of the SDGs,” says Robbie Miles (manager of the Allianz Food Security fund). “The intention remains to find companies that are going to benefit from the implementation of sustainable solutions, which however must be profitable. Only those companies that are able to reinvest their cash flows will be able to provide solutions to the challenges facing our society.”
Profitability and sustainability
The commitment in the various products is also reflected in the voting at general meetings. Particular attention is paid to the remuneration of the management team. “That’s a particularly sensitive topic in the United States, and we voted against 85 percent of the resolutions taken in that area, so that CEO pay is aligned with sustainable performance measures, and long-term capital allocation.”
Allianz Food Security (ISIN: LU2211817197) is part of a range of six funds that aim to make a positive impact on the SDGs, alongside Allianz Global Water, Allianz Clean Planet, Allianz Smart Energy, Allianz Sustainable Health Evolution and Allianz Positive Change. “The latter strategy incorporates the best ideas from the other five funds, for investors who are not strongly convinced by any of the sub-strategies,” says Robbie Miles. The strategy he manages was launched late last year, and currently boasts a return of almost 20 percent.
Key challenges
Allianz Food Security’s objective is to take positions in companies that are capable of providing solutions to the food needs of the current generation. At the same time, future generations must remain able to feed themselves. “Food needs will increase by 50 percent by 2050. The world’s population will rise from 8 to 10 billion, while food needs will become increasingly diverse and rich in emerging countries.”
At the same time, much of the current production is currently wasted in developed countries, while several emerging countries continue to face famine. However, there are 650 million people suffering from obesity, but 820 million people are dying of hunger. “Finally, we also face the challenge of an agricultural sector that accounts for one-third of global greenhouse gas emissions.
Strong impact
The portfolio composition focuses on companies where at least 20 percent of sales can be specifically linked to a positive SDG impact. “In reality, that impact fluctuates rather around 85 percent for the entire portfolio. After all, we want to exclude all risks of greenwashing in the fund,” says Robbie Miles. The portfolio will therefore invest in a large number of companies that are relatively unknown to Belgian investors, such as Medifast, Nomad Foods, Bunge, Deere&Co, SunOpta, Alfa Laval and Kerry Group.
So he is pushing forward a company called Atlantic Sapphire. That’s a company based in Florida that specializes in managing salmon farms. “That company has come up with a solution to one of the main problems in salmon production, specifically the very negative impact on marine ecosystems. In addition, the company does not use antibiotics and wants to supply local markets above all. It is a very interesting company despite its major operational challenges.”
Fund details
LU2211817940
YTD performance: +13.48 percent