The Belgian market for sustainable products is currently growing faster than the Dutch market, which is already more established. Thematic management is developing strongly in all areas, with growth of 30 percent by 2020. ‹Themes such as climate change and the energy revolution, robotisation and healthcare have been hugely successful.›
These are some of the take-aways from our interview with Naïm Abou-Jaoudé (photo), the top executive of Candriam. Despite the pandemic, the asset manager has a particularly strong 2020 behind it.
What trends do you currently see in the Belgian, Dutch and Luxembourg markets?
Abou-Jaoudé: ‹In Belgium, we have seen SRI gaining momentum in recent years, both among institutional and retail investors. The number of funds with a ‹Towards Sustainability› label from Febelfin has grown very rapidly: there are already 540 of them. The assets under management in SRI funds distributed in Belgium have increased by more than 40 percent by 2020 according to [Belgian asset management association] Beama. Those funds already account for 31 percent of total assets of public and non-public funds distributed in Belgium›.
Thematic funds also have the wind in their sails, especially among retail investors. Assets under management in these funds will have increased by 30 percent by 2020. Themes such as climate change and the energy revolution, robotisation and healthcare have been hugely successful. We have seen this in the ‹future funds› we have set up in partnership with Belfius.›
‹In the Netherlands, SRI is growing less strongly, because there the integration of ESG criteria has already taken place, certainly in pension funds of which three quarters already have an ESG policy. In this strong institutionally-oriented market, and in the context of the low interest rate environment, demand is naturally shifting towards illiquid strategies such as private debt, real estate and private equity.
Finally, Luxembourg can benefit from its position as a reference hub for management companies in Europe in the context of Brexit. After all, important players have moved there. Here too, the trends I just mentioned are in play: SRI, of course, with a sharp increase in the number of labelled funds (330 at present), but also illiquid assets and thematic funds, which have found great resonance and have steadily attracted fresh money. Themes such as the environmental transition, healthcare or the rise of new technologies have also met with great approval from investors.›
How do you plan to integrate European sustainability standards?
‹We have been integrating ESG criteria and sustainability risk analysis into our investment process for many years now. At Candriam, therefore, we mainly need to adapt our communication and review the dissemination of information that the regulation reviews. I would like to take this opportunity to emphasise that these regulatory developments are moving in the right direction, because they enable all market players to play the sustainability card to the full. They also ensure that the business world and the general public develop more knowledge in the field of SRI. This is an enormously important part of making the economy more sustainable, and we are doing our bit through the Candriam Academy, which already had 6,000 members at the end of last year.
How are the assets under management developing in the various segments?
‹Candriam has achieved a net inflow of EUR 3.9 billion in 2020, bringing it to more than EUR 42 billion over six years. Money flowed mainly into thematic equities, which already account for EUR 8.5 billion of assets under management thanks to EUR 2.5 billion of inflows in 2020, and ESG, across all asset classes. Especially high yield, ESG and emerging market bonds with an ESG filter raised a lot of money. This brought the total assets under management by Candriam to EUR 140 billion at the end of December›.
Thanks to the demand for specialised health funds, two years ago Candriam launched a specific oncology fund, a strategy that was successfully marketed in Belgium together with Belfius. In response to demand from clients, who want to create a positive social impact and boost the development of diagnostics and cancer treatments, this fund has grown to 2 billion assets under management in just two years.›
Candriam is part of New York Life Investments - the subsidiary of New York Life, the largest life insurer in the United States. Naïm Abou-Jaoudé has worked for the Group since 1996 and has been CEO since 2007. Assets under management currently amount to EUR 140 billion. It is an active manager, employing 550 investment professionals. Responsible investment is central. In addition to diversified investment solutions, the house offers equity and bond management, absolute return strategies, asset allocation and real estate. The name Candriam is an acronym that stands for ‹Conviction AND Responsibility In Asset Management›.