Case Study: How to express your stewardship preferences in a pooled fund
As an independent and open architecture fund solutions provider, Carne is able to partner with other entities to construct bespoke pooled funds to meet investors’ needs.
In the following case study, we detail how Carne, in partnership with Minerva Analytics, have collaborated to develop an investment solution that allows pension scheme trustees to express their stewardship preferences within pooled funds.
This service has been specifically designed for UK pension schemes, to allow trustees to utilise a range of templates to exercise their voting preferences.
Why take advantage of split voting?
- Exercise genuine choice over how your stewardship policy is implemented on key topics such as climate change, executive compensation, and board diversity.
- Make a meaningful impact on how the firms you invest in are governed.
- Use the latest voting technology to disrupt the traditional and outdated ways of doing business.
- Help ensure compliance whilst driving good practice sustainability standards for long term success.
“Pooled fund index strategies are an extremely cost-effective proposition for long-term investors. For too long, however, that has meant compromising on stewardship and voting issues. We’ve always believed that the application of smart technology can offer investors the best of both worlds: cost effective asset management with active ownership. We are therefore delighted to partner with AMX by Carne on this important and timely initiative.”
Sarah Wilson, Chief Executive, Minerva Analytics
What are my choices?
Carne, in collaboration with Minerva Analytics, currently offers the following approaches:
- An “off the shelf” good practice voting policy e.g. PLSA or AMNT Red Lines
- A bespoke policy that fully aligns with an investor’s Statement of Investor Principles*
How does it work?
- Minerva translates each policy into a Voting Template, which is a set of rules that governs how votes are cast.
- For each shareholder meeting, Minerva uses your Voting Template to determine how to vote.
- Voting Templates ensure that each company and shareholder meeting is analysed objectively, and the resulting guidance is applied consistently.
How is my vote “split”?
If investors in the Fund have chosen Voting Templates with different voting outcomes Minerva will split the vote in line with each investor’s weight in the fund.
How can I invest?
- The first fund that incorporates this split voting service launches in Q3 2023. The proposed fund, AMX UCITS CCF – DWS – Global Low Carbon Stewardship Fund, with DWS Asset Management responsible for providing efficient portfolio management and tracking the Solactive ISS ESG Global Markets Net Zero Pathway Custom Index.
- The proposed AMX UCITS CCF – DWS – Global Low Carbon Stewardship Fund – and future funds – is available on Carne’s AMX hosted funds platform, and offered within a tax-efficient pooled fund structure for UK pension scheme investors.
- Carne will collaborate with asset owners and investment consultants to design and launch a bespoke pooled fund combining their preferred index and/or portfolio manager, in addition to a customised voting template if required.
*Minerva can work with an investor or investment consultant to create a custom template aligned with the investor’s philosophy. An extra fee would be payable for this service.
Carne offers a global, multi-asset platform that:
- Provides investor choice from several voting templates.
- Records investor stewardship preferences
- Supports online reporting.
- Facilitates tax efficient pooled fund structures.
- Leverages scale to reduce fund operational expenses.
Minerva is a UK-based proxy voting specialist, bringing ESG research, data and vote tech to global asset owners.
Minerva empowers professional investors with the essential tools and critical data to make informed, sustainable stewardship and proxy voting decisions.
The Asset Management Exchange CCF (the “Fund”) is an umbrella Common Contractual Fund, authorised by the Central Bank of Ireland as a Qualifying Investor Alternative Investment Fund pursuant to the Investment Funds, Companies and Miscellaneous Provisions Act 2005, as amended. The authorised Alternative Investment Fund Manager of the Fund is Carne Global Fund Managers (Ireland) Limited. Carne International Financial Services (UK) Limited is appointed as a Distributor. The Asset Management Exchange UCITS CCF (the “Fund”) is an umbrella Common Contractual Fund, authorised as a UCITS by the Central Bank of Ireland pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended.
Investors and potential investors should be aware that the CCFs are not open to US investors.
How can Common Contractual Funds improve tax efficiency, cross-border distribution, and performance outcomes for asset managers and institutional investors?
26 January 2023
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