Baillie Gifford grows ESG team, puts funds on watch

Baillie Gifford's current Edinburgh HQ

Edinburgh-based asset management giant Baillie Gifford announced it has placed 12 of its “UK authorised” funds on a watchlist for performance and will “monitor progress and will determine if further action is required in the future.”

Baillie Gifford also said it has hired an additional nine analysts in the past year for its Environmental, Social and Governance (ESG) team, giving the firm 22 ESG analysts and 40 ESG experts in total.

The Edinburgh firm said it has appointed a Head of Climate Change and established an ESG data project team to support investment managers in integrating ESG issues into their decision-making.

In its “Value Assessment Report” for its UK fund range as at March 31, 2022, Baillie Gifford said: “Our conclusion is that value has been delivered for the vast majority of our funds: 36 of our 37 funds.

“We deemed one fund not to have provided value.”

However, the Edinburgh investment giant added: “In terms of this year’s assessment, performance of the funds has generally been good over the long term in challenging circumstances.

“But there were some exceptions.

“We rated seven funds as amber and five red for this criterion.

“We will continue to monitor progress and will determine if further action is required in the future.

“The period under review has seen much volatility in markets.

“This has given rise to an environment where the share prices of many of the funds’ equity holdings have been hit indiscriminately, whether or not underlying companies are performing well operationally.

“Similarly, many of our income and multi asset funds have been impacted by the challenging market environment.

“While the significant volatility in financial markets has resulted in poor absolute and relative performance in the shorter term for many funds, returns over their longer-term recommended holding periods have broadly held up well and are ahead of both the index and target benchmark (index plus an outperformance expectation) …”

Full details on the Baillie Gifford funds affected can be read here.

On its ESG moves, Baillie Gifford said: “Environmental, Social and Governance (ESG) issues are increasingly important determinants of long-term success for companies.

“So they are often considered in our investment process, even in cases where a strategy does not have a specific ESG objective.

“Dedicated ESG analysts are integrated into most investment teams to enhance our understanding of relevant ESG factors, such as company treatment of stakeholders and adoption of sustainable business practices …

“In the past year, the firm has hired an additional nine ESG analysts, bringing the total to 22, and integrated them into the investment teams.

“The firm has also appointed a Head of Climate Change and established an ESG data project team, which will support investment managers in integrating ESG issues into decision-making.”

 

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.