Sedco Capital, a global investment advisory firm, and Lombard Odier, a Swiss private banking group, have launched the SC LO Global ESG Equities Fund, an ESG-focused and Shariah-compliant UCITS strategy focused on developed market equities.  

The Fund’s composition reflects a convergence of Sedco Capital’s Prudent Ethical Investment (PEI) approach with Lombard Odier’s investment expertise in the sustainability revolution.  As such, it will employ a pragmatic, systematic, and multi-factor approach that aligns Shariah-compliant, responsible investment, and sustainability principles to construct a portfolio with a high ESG score.

The Fund aims to deliver capital growth through an active asset allocation strategy and careful risk management, with the goal of outperforming the Dow Jones Islamic Market World Developed Total Return Index.  

The Fund will be managed by Saudi-based Sedco Capital, a global asset management and investment advisory firm, the first Saudi company and the world’s first Shariah-compliant asset manager to have become a signatory to the UN Principles of Responsible Investing (UNPRI) in 2014.

The investment adviser will be Lombard Odier. Lombard Odier is a B Corp certified group with more than twenty years’ experience developing and refining sustainable investment solutions, and half a century’s commitment to clients in the Middle East.

The Fund will combine Sedco Capital’s roots of almost 40 years of Islamic finance expertise and its Shariah board with Lombard Odier’s long-established sustainable investment expertise. The alliance of these two prestigious financial institutions with a shared, long-term vision and complementary expertise gives the fund an exceptional platform for success.

Samer Abu Aker, CEO of Sedco Capital, said: “In today’s global investment climate, characterized by an uneven recovery from the COVID-19 pandemic, significantly heightened risks from climate change, rapidly evolving technologies, and unpredictable market cycles, our clients want the confidence that their capital is being deployed into high-performing, stable, ethical, and sustainable assets.

“The SC LO Global ESG Equities Fund convenes Sedco Capital’s emphasis on Shariah-compliance and responsible investment principles with Lombard Odier’s time-tested heritage of pioneering sustainable investment solutions. At Sedco Capital, partnership has always been a fundamental enabler of our go-to-market strategy across all our offerings. I am confident that our aligned interests will speak clearly to investors who sit at the intersection of strong risk-adjusted performance and ethical decision-making.”  

Arnaud Leclercq, Partner Holding Privé and Head of New Markets, Lombard Odier, said: “We’ve been wealth management specialists for over two centuries, and social responsibility is in our DNA. It was natural for us to work with Sedco Capital as they share our values.

“Their multi-asset investment expertise and deep roots in the region are a good fit with our innovative solutions and strong global team of 130 investment professionals. Together we are responding to rising client demand and seeking to offer clients the best of both worlds: sustainable investing combined with Islamic finance principles. We expect the new fund to successfully appeal to the rapidly growing number of Shariah-compliant and conscientious investors in the Middle East, South Asia, Europe and elsewhere”.

The Luxembourg-registered UCITS fund will use the constituents of the Dow Jones Islamic Developed Index as investment universe. It will then exclude the least sustainable, riskiest companies such as those implicated in severe controversies and those not complying with LO SRI policy. It then favours businesses with best-in-class ESG scores using a proprietary ESG materiality framework.

It also integrates impact metrics (carbon emissions) to improve the footprint of the strategy. It will then favour the companies that are most financially attractive, using balanced exposure to five financial factors believed to contribute to stock outperformance.  The end result is an optimized, Shariah-compliant, more sustainable equities portfolio. – TradeArabia News Service