With a newly consolidated listed equities team, IFM Investors has launched a research lab to allow innovative collaboration with clients for bespoke investment solutions.
IFM recently announced that Neil Carter and Aidan Puddy would be the new co-heads of the listed equities team, which brings together the former indexed and quantitative equities team and the former active equities team.
“We’ve got three equities teams at IFM – the indexed team, the active small caps team and the active large caps team – and they were all established at different points in time,” Puddy explains. “Because we started at different points in time, the teams initially needed to get their businesses up and running. It’s now time to see what the next phase of equities at IFM is and bring the teams under joint leadership.”
IFM Investors emphasises that the move to unite all three areas under one listed equities team of 27 investment professionals is a consolidation, which will further boost the firm’s collaborative approach with clients through the IFM Investors Research Lab, which brings together research capabilities from across the team. The research lab is led by Laurence Irlicht, executive director, indexed and quantitative equities, and Mark McClatchey, executive director, active equities.
“The idea is for the research lab to support the development of internally and externally generated ideas,” Carter says. “We have gone out to our investors and told them that the new research facility is available to them, not just for product or fund ideas, but also for stand-alone data analysis that they might not be best placed to conduct. We’re skilled in using the latest tech tools such as big data, learning techniques that’s available for all clients.”
Carter notes IFM Investors has a “long history” of working collaboratively with its clients across the listed equities group.
“We’re taking that collaboration and moving it to a higher level,” he says. “We’ve had some clients that we’ve been close to that have asked us to work on specific projects with them. But there’s probably a group of clients that haven’t even realised that this is an option or they’re in a position to ask about it. We’re broadening the offer and deepening the engagement, and they’re now aware we can provide such a deep level of analysis.”
As part of this consolidation and increased offering to clients, IFM Investors is also increasing its emphasis on environmental, social and governance (ESG) factors through its ESG Champions, comprising four people from the listed equities sub-teams, plus four full-time responsible investment professionals, Puddy says. ESG Champions will also work on IFM’s Low Carbon Equity Solutions, as well as further integration of ESG factors into existing processes and quantitative models.
The ESG Champions conduct existing programs such as proxy voting and engaging with companies on ESG-related concerns, Carter says.
“We also conduct special projects on issues of concern such as cluster munitions, and other ethical supply chain concerns,” Carter explains. “We’re currently working on a project on Coles and Woolworths around ethical use of labour hire firms in their supply chain. The idea is how we can work with clients and through our membership in the Australian Council of Superannuation Investors [ACSI] to maximise our impact.”
ESG-related activities are in line with IFM Investors’ business model of customising for and working with clients, Puddy says.
“This is where there’s a bit of overlap with the research capability as well,” he says. “In the past, clients have wanted a particular index-style investment with a particular ESG focus. We’ve constructed customised benchmarks that negatively screen companies that our clients have wanted excluded from their investment universe. Other clients have wanted, say, an indexed fund that has a lower carbon footprint than a benchmark. In addition to our current suite of products, we will look at developing some further IFM Investors ESG products as well.”