Perpetual launches two Trillium ESG funds in Australia

Perpetual launches two of Trillium’s funds in Australia as it looks to capture a greater portion of the sustainable investing market.

Perpetual CEO Rob Adams: The COVID-19 crisis had triggered investor interest in the fast-growing segment of the market. Picture: Supplied

A month after completing its acquisition of Boston-based ESG fund manager Trillium, Perpetual has launched two of its funds in Australia as it looks to capture a greater portion of the sustainable investing market.

Speaking to The Australian ahead of the launch of the Trillium ESG Global Equity Fund and the Trillium Global Sustainable Opportunities Fund, Perpetual head of global distribution Adam Quaife said the COVID-19 crisis had triggered investor interest in the fast-growing segment of the market.

The pandemic had brought to light the need for good governance in companies, he said.

“The interest in ESG globally has accelerated in recent times as a consequence of the COVID-19 pandemic, as well as locally with the extreme climate events experienced in Australia in the recent past,” he said.

“We are proud to now offer Australian investors access to (Trillium’s) process whose objective of providing investors with long-term capital growth through investment in global companies driving the transition to a more sustainable economy fits comfortably with Perpetual’s focus on fundamental research and analysis of quality, value and risk.”

Perpetual has been fielding inquiries from institutional investors, asset consultants and private clients since it announced the acquisition of the fund manager at the start of the year, Mr Quaife said.

The Trillium ESG Global Equity Fund is the US fund manager’s flagship product, with a 20-year track record. It is actively managed, with a portfolio of 70-150 global equities and invests in companies that are leaders in managing ESG risks and opportunities. It has outperformed its benchmark, the MSCI All Country World Index NR, on a one-, three- and five-year basis but has underperformed in the year to date.

The Trillium Global Sustainable Opportunities Fund, meanwhile, is a high-conviction, sustainability-themed strategy that “invests in companies positioned to thrive during the ongoing transition to a more sustainable economy”.

It invests in companies contributing to three sustainability themes through their core business: climate solutions; economic empowerment; and healthy living. On a one-year basis it has returned 9.8 per cent, net of fees, compared to the benchmark S&P1500’s 6.1 per cent. Over five and 10-year periods it has slightly underperformed the benchmark.

Trillium’s new Australian funds will largely mirror the US domiciled funds in terms of investment teams and fees, as will its investments in the global ESG fund offered to local investors. The Australian sustainable opportunities fund, in comparison, will have a global portfolio of stocks, while its US counterpart is more US-centric.

“The market here in Australia has transitioned to a point where ESG is mainstream and so it‘s a large theme attracting a lot of interest. We feel that there’s some competitive advantage (with Trillium) in that they have a dedicated advocacy team,” Mr Quaife said.

Announcing the $54m Trillium acquisition in January, Perpetual chief executive Rob Adams said it was an important step for the fund manager as it embarked on a strategy of adding world-class investment capabilities to the business.

Founded in 1982, Trillium is one of the largest socially responsible investment managers in the US.

Perpetual last month announced the acquisition of 75 per cent of US-based asset manager, Barrow Hanley in a move that will more than triple its funds under management to $92.3bn and add 21 new strategies across asset classes and regions including the US, Europe and Asia.