Water and Waste virtual event

Water and Waste: The dual investment opportunity

VIRTUAL EVENT Water and Waste: The dual investment opportunity

<big>For Professional Investors only</big>

Water and Waste: The dual investment opportunity

We opened up with Gavin White, Head of UK Intermediary Sales, taking us briefly through the opportunity we have seen in Water and Waste, which encouraged us to bring Bertrand and Saurabh to Regnan 12 months ago. He then went on to discuss Regnan, and their history and position within J O Hambro Capital Management.

Introducing Water and Waste

Water is essential for life on earth, and is a precious yet underappreciated and undervalued resource. It is used in nearly all forms of economic activity, including food production, industrial manufacturing, textiles, energy production and materials extraction; put simply ‘there is no economy without water’, yet ‘there is no sustainable economy without waste management’.

Watch the highlights of the event below

Who are Regnan?

Regnan is the specialist sustainable and impact investing brand of the Australian-listed asset manager Pendal Group, which encompasses J O Hambro Capital Management, Thompson, Siegel & Walmsley and Pendal Australia. Regnan’s focus is on delivering innovative solutions for sustainable and impact investment, leaning on over 20 years of experience at the frontier of responsible investment. “Regnan” is a registered trademark of Pendal. J O Hambro Capital Management has been the lead in distributing the Regnan investment strategies to clients.

Regnan started life in 1996 in academia at Monash University in Australia, as the Monash Centre for Environment Management. This academic background has always stayed with Regnan as a core part of their DNA. The Monash Centre for Environment Management became Monash Sustainability Enterprises, and started to offer advisory services and support to businesses and investors on ESG, sustainability and stewardship issues. They have also worked with bodies like the UN PRI to support their work. By 2007 the business had outgrown its academic roots, and became Regnan, offering fully fledged investment advisory services and research; and in 2020 they launched their first investment product: the Regnan Global Equity Impact Solutions Strategy, managed by Tim Crockford.

This history in academia and grounding in research is key to everything Regnan do, and informs how they think about the world and invest. Deep thinking goes into understanding the complex systems in which we function, and how sustainability and ESG decisions are never simple. By appreciating the full complexity of a decision, the team are better able to invest, and consider how we can make a measurable impact through our investment actions.

Pendal Group ownership structure

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Water and Waste; a perpetual opportunity Water and Waste: The dual investment opportunity

Water and Waste; a perpetual opportunity

Saurabh Sharma, Fund Manager on the Regnan Water and Waste Strategy, then took to the stage to talk us through the opportunity he sees in Water and Waste.

Saurabh explained that in our opinion, from a risk-return perspective, investing in Water and Waste is an appealing proposition. Compared to many other popular sectors, over the long term Water and Waste offers the opportunity for diversification and strong potential returns, but with lower volatility compared to cyclicals.

Water and Waste – Appealing long-term risk-return profile

With this in mind, what is the structural case for investing in Water and Waste? We believe that this represents a perpetual opportunity, as Water and Waste are so integral to human life and to a more sustainable future. We feel that there are five key drivers to the Water and Waste investment case.

Five key drivers to the Water and Waste investment case

Saurabh explained how it is clear that the way we approach the issues of Water and Waste and deal with them in the future will be hugely important to society. But what does this mean for investors, and how can they exploit the opportunities on offer here?

We see the Water and Waste sector as vibrant and diverse, with a wide variety of companies. The sectors are growing as the demand around these areas changes, with new entrants and increasing market cap.

Water and Waste long-term performance

We feel that this all contributes to a compelling investment case for the sector, and the long-term performance is a testament to this.

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Saurabh Sharma – Fund Manager
12 years of industry experience, joined JOHCM in April 2021

Saurabh is part of the Thematic Investing strategy at Regnan. He is a Fund Manager on the Regnan Sustainable Water and Waste strategy. He joined Fidelity in 2014 as a Product Specialist before becoming an Assistant Portfolio Manager in February 2020. He has also held equity research analyst roles at Moody's Analytics and GlobalData. Saurabh has an MBA in Finance from IBS Hyderabad School in India and is an CAIA and ICFAI Charterholder.

What makes Regnan special? Water and Waste: The dual investment opportunity

What makes Regnan special?

Oshadee Siyaguna, Senior ESG Analyst, then took to the lectern to cover what makes Regnan so special. Regnan are the impact investing arm of J O Hambro, and also house an insight and advisory centre. We believe that what makes their approach special is their ability to understand complex problems, and provide insightful solutions. Regnan do not approach ESG or sustainability as a box-ticking exercise, and by deeply engaging with problems in a thoughtful way we believe we can better inform our investment decisions. In order to power our thinking we employ individuals who are interdisciplinary; being generalists allows us to apply many lenses to the same problem.

Multiple factors, one story

We then apply an in-depth research approach as analysts working alongside the fund managers and investment teams, to understand a specific company, sector or problem. Central to our approach is understanding value creation, and how ESG factors can have a material impact on this.

The Regnan approach

This research is then reflected by our ESG analysts working with fund managers. The investment teams consider the Regnan support across three key areas: sustainability assessment, stewardship and exclusions. We look at these three areas, and also consider how we can generate positive returns and create a positive impact.

Three areas of Regnan support

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Oshadee Siyaguna – Senior ESG Analyst

BEng(Civ)(Hons), MScFin, MEnvMgmtSust, GradDipInterDevPracticeOshadee commenced at Regnan as an ESG analyst in 2015. He is responsible for stock level assessment and engagement, as well as research into ESG themes and issues. Prior to joining Regnan, Osh was Assistant Vice President at PolitEcon Research where he conducted research into ESG integration with a focus on sustainable investing. He has also interned at the UNEP Finance Initiative, providing support for sustainable supply chain and climate change adaptation projects.Osh holds a Master of Arts in Environmental Management and Sustainability and a Postgraduate Diploma in International Development and Environmental Analysis, both from Monash University. He has also studied at Coventry University (UK), obtaining a Master of Science in Finance and a Bachelor of Engineering (Civil).

Q & A – 12 months investing with Regnan in Water and Waste Water and Waste: The dual investment opportunity

Q & A – 12 months investing with Regnan in Water and Waste

Nearly 12 months after joining Regnan – the impact investing arm of J O Hambro Capital Management – Bertrand Lecourt, Senior Fund Manager, joined Gavin White, Head of UK Intermediary Sales, to run over his first 12 months at the firm.They covered what encouraged Bertrand to make the decision to join the firm, how it has gone versus his expectations, and how the strategy has developed and performed since he started.

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Bertrand Lecourt – Senior Fund Manager
22years of industry experience, joined JOHCM in April 2021

Bertrand leads the Thematic Investing strategy at Regnan. He is Senior Fund Manager on the Regnan Sustainable Water and Waste strategy. Previously he was a Portfolio Manager at Fidelity International, where he launched and managed the Fidelity Funds - Sustainable Water & Waste Fund. Prior to joining Fidelity International in 2018 Bertrand was a Portfolio Manager at Polar Capital and the founder and CIO of Aquilys Investment Management. Before moving to the buyside, Bertrand was Head of Equity Research, France at Deutsche Bank and a utilities analyst at Dresdner Kleinwort Benson and Goldman Sachs. He holds an MSc in International Finance from HEC School of Management, France, an MSc in Money, Banking and Finance from Birmingham University, UK, and a DEA in Monetary Economics from Orleans University, France.

The business and consumer perspective Water and Waste: The dual investment opportunity

The business and consumer perspective

Mike Barry, the former Head of Sustainability at M & S, then joined us as our keynote speaker. Mike Barry is an award-winning sustainability leader, and was Head of Sustainability at M&S. He led their change management programme, spearheading initiatives in net zero, sustainable energy and zero waste to landfill. He joined us to provide an industry and consumer perspective on water, waste and sustainability, and how they are driving the need for better solutions to these issues.

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The Regnan Water and Waste Strategy Water and Waste: The dual investment opportunity

“There is no economy without water, no sustainable economy without waste management.”

Water is essential for life on earth and is a precious, yet underappreciated and undervalued resource. It is used in nearly all forms of economic activity including food production, industrial manufacturing, textiles, energy production and materials extraction – put simply ‘there is no economy without water’ yet ‘there is no sustainable economy without waste management’. This is why we include a ‘waste’ component to our investing – the two segments work together.

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Disclaimer Water and Waste: The dual investment opportunity

Disclaimer

Issued and approved in the UK by J O Hambro Capital Management Limited (“JOHCML”) which is authorised and regulated by the Financial Conduct Authority. Registered office: Level 3, 1 St James’s Market, London SW1Y 4AH.
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Investments include shares in small-cap companies and these tend to be traded less frequently and in lower volumes than larger companies making them potentially less liquid and more volatile.
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The registered mark J O Hambro® is owned by Barnham Broom Holdings Limited and is used under licence. JOHCM® is a registered trademark of JOHCML.
Regnan is the specialist sustainable and impact investing brand of the Australian-listed asset manager Pendal Group, which encompasses J O Hambro Capital Management, Thompson, Siegel & Walmsley and Pendal Australia. Regnan’s focus is on delivering innovative solutions for sustainable and impact investment, leaning on over 20 years of experience at the frontier of responsible investment. “Regnan” is a registered trademark of Pendal.
The Regnan business consists of two distinct business lines. The investment management business is based in the United Kingdom and sits within J O Hambro Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority and is registered as an investment adviser with the SEC. “Regnan” is a registered as a trading name of J O Hambro Capital Management Limited.
Alongside the investment team is the Regnan Insight and Advisory Centre of Pendal Institutional Limited in Australia, which has a long history of providing engagement and advisory services on environmental, social and governance issues. While the investment management team will often draw on services from and collaborate with the Regnan Insight and Advisory Centre, they remain independent of the Regnan Insight and Advisory Centre and are solely responsible for the investment management of the Regnan Sustainable Water and Waste strategy.
Sources for all data: JOHCM/Bloomberg/Lipper/MSCI Group (unless otherwise stated).