Alceda Fund Management is partnering with ECPI Group to launch funds that match risk and return characteristics of the ECPI Global Megatrend Equity Index (EGME Index).
ECPI and Alceda will collaborate with international investment firms in providing customised and tradable funds based on the “mega-trend” philosophy and each investment company’s approach.
The Alceda UCITS Platform (AUP) will enable fund managers to structure their investment strategies in a UCITS format. The addition of the ECPI related funds will provide further portfolio diversification for the AUP in the domain of sustainable investments.
Michael Sanders (pictured), chairman of the board, Alceda Fund Management, says: “We are delighted to partner with ECPI, a well-established index provider and a pioneer in providing megatrend indexing solutions. ECPI has expertise in structuring innovative investment management solutions in the equity, fixed income and alternatives space for large institutional investors’ portfolios.”
ECPI and Northern Trust Global Investments have collaborated to create a tradable custom benchmark using the “mega-trend” investment strategy. Northern Trust is implementing the strategy with the Intelligent Indexing approach to replicate the risk/return characteristics of the index while minimising transaction costs and active risk.
“Through this partnership with ECPI, we will be further expanding the portfolio of funds on the AUP focusing on issues such as sustainability,” says Sanders. “We see tremendous opportunities to develop additional partnerships, such as the one we already have with Northern Trust, with more international investment firms in the near future.”
Megatrends represent the main social, environmental and demographic changes that will impact mankind in the next decades, focusing in particular on the following topics:
· Climate change is exposing companies to new sources of physical, regulatory and reputational risks and opportunities.
· Emerging markets are considered the global growth engine due to consumption growth that will affect two billion people by 2030 and investment growth through infrastructure demand and the involvement in the international market.
· Scarcity of resources: the scarcity of natural resources, limited farmland, climate change, population growth and changing dietary behaviour are all having a significant impact on prices.
· Population dynamics: increased life expectancy coupled with geographic distribution and wealth redistribution are impacting the performance of equity markets generally, but also individual stocks specifically.
ECPI is a provider of sustainability research, indices and ratings on traditional and innovative asset classes such as equity and credit portfolios, hedge funds and other alternatives.
Paolo Sardi, chief executive of ECPI Luxembourg, says: “Using our ECPI Megatrend Strategy, we have built an innovative investment tool to gain from the wide range of social, environmental and demographic issues which will have a fundamental impact on investments.
“Partnering with Alceda offers us the flexibility to add new funds to the megatrends fund umbrella. Our first partnership will be with Northern Trust, a multi-asset class investment manager with long standing expertise in index management and currently USD810.2bn of assets under management. We’re planning to launch more funds with well-known asset managers within the next months.”