Kennedy Capital Management (Kennedy Capital), a provider of investment management services to pension funds, endowments, foundations and high net-worth individuals, has launched a small and mid-cap (SMID) mutual fund optimised for Environmental, Social and Governance (ESG) principles.
The ESG SMID Cap mutual fund (KESGX) applies a proprietary approach to ESG integration, incorporating an inclusionary and exclusionary stock selection framework in the portfolio construction process.
“Bringing a dedicated ESG mutual fund to market provides an additional level of rigour for clients focused on investing in well-managed, environmentally and socially responsible companies,” says Donald Cobin, CFA, President, Chief Executive Officer, and Chairman of Kennedy Capital. “We believe the small and mid-cap investment universe offers compelling opportunities for ESG-oriented investors, and our investment team is well-positioned to help clients capitalise on the unique characteristics of this portion of the equity market.”
The ESG SMID Cap fund utilises the same approach as the Kennedy Capital ESG SMID Cap strategy. Launched in January 2017, the strategy prioritises investment in companies that leverage an environmental or societal advantage to compete effectively in their end markets. In aggregate, the constituents of the portfolio have significantly lower greenhouse gas emissions and favourable governance scores compared to the Russell 2500TM Index. In addition, the strategy is fossil fuel free and has no exposure to the producers of tobacco, civil firearms, or controversial weapons.
The ESG SMID Cap mutual fund is managed by Christian McDonald, CFA, a 13-year veteran of Kennedy Capital.
“The bottom-up, labor intensive investment process employed by Kennedy Capital enables our 15 sector-specific analysts to identify attractive investment candidates with strong ESG profiles,” says McDonald. “In addition, our ongoing interactions with senior management teams provide a platform for engaging in discussions on ESG issues, which is further bolstered by our industry experience that helps anticipate and identify material risks and opportunities. Overall, our approach is built to truly assess and address the complexity of ESG analysis for small and mid-cap companies.”
A focus on ESG and sustainability has long been a key priority for Kennedy Capital itself. The firm has worked over time to reduce its own environmental footprint, utilising a Sustainable Green Partner for printed materials, installing energy-efficient lighting in its offices, and offsetting paper consumption with newly planted trees in reforestation projects. In addition, Kennedy Capital has managed accounts with a socially responsible mandate for more than 25 years.
