Friends Ivory & Sime, the international asset management firm based in the United Kingdom, has registered with the Securities and Exchange Commission to launch two funds for the U.S. market, in the first quarter of 2000.
The company, which specializes in socially responsible investments (SRI), has been running SRI funds across the pond since 1984 but the new funds will be the first for the U.S. market,
George Walker, chief marketing officer at Friends Ivory said.
The two funds currently in registration are the
Friends Ivory & Sime U.S. Equity Fund which will invest in American large-cap core growth companies and the
Friends Ivory & Sime European Equity Fund which will invest in European large-cap core growth companies. The European fund will be the only fund of its type in the U.S., Walker said.
Friends already has offices in New York managing money for American clients, thus making the funds' launch more convenient.
"U.S. socially managed assets are growing very rapidly," Walker explained. "$1.1 trillion has already been invested with social screened funds in the U.S. The next survey (on SRI)-- which has not been released yet -- says that over the last two years that number has almost doubled. We think we have something to add here. We are the only manager of our size taking a global approach to socially responsible investing."
The funds will be targeting institutional and retail investors and the not-for-profit sector, IRAs, financial planners and wrap and 401k programs.
Walker said the company is in talks with several 401(k) providers but would not say which. "Most 401(k) providers are finding they being asked by their sponsors for SRIs. So there is a demand out there. We should be able to plug that gap."
In regards to marketing the new funds, Walker said the company will not target the public directly. However, to separate itself from the rest of the SRIs, Friends Ivory & Sime will be donating 10% of its fees to support charitable organizations.
"Socially responsible investing is about creating a better environment," Walker said. He would not elaborate as to the identity of the charities Friends will be funding, but he did say it is considering educational foundations as well as medical charities.
The U.S. fund will be managed by an U.S. equity team headed by
Andrew Pringle. The European fund will be managed by a pan-European team in London, led by
Debbie Clark.
The investment process used by Friends Ivory & Sime is different than most SRIs, Walker explained. "Sometimes people think when you are running SRI you have to include the weird and wonderful. Our approach is investment led."
When choosing investments a company has to get through two sets of screens, Walker said, first an investment screen and then an ethical screening. "There are companies that are wonderfully ethical but if they don't pass our investment screens we won't buy them."
Friends Ivory & Sime uses two types of screens when considering a company, a positive and a negative. The positive screen seeks out companies that are inline with the values of Friends Ivory & Sime. Some examples would be companies that manufacture environmental products, seek good human rights such as third world manufacturing and resist child labor or pay livable wages to employees.
The negative screens look to weed out companies that might make more than 4% of their profit from industries such as tobacco, alcohol or nuclear arms. "Most portfolios look for the negative or bad things but our force is dual. We are also seeking companies that are responsible."
There is no Web site yet for Friends Ivory & Sime but there will be one by the time the funds are launched, Walker said.
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