UBC Investment Management Trust using funds from portfolio to help advance ESG adoption among Hedge Fund managers
As part of its evolving Responsible Investing Strategy, UBC Investment Management Trust Inc. ("UBC IMANT") is using its influence and capital under management to advance ESG integration within the Hedge Fund sector - a group of fund managers that has been trailing its peers in adapting to the increasing importance that environmental, social, and governance factors contribute to investment performance.
On behalf of the UBC Endowment, UBC IMANT has made an initial $25M USD investment in the Titan Eclipse Fund LP managed by Flatworld Titan LLC, a joint venture between Titan Advisors LLC and Flat World Partners. The Titan Eclipse Fund is among the first hedge fund vehicles to move the ESG mandate forward by accelerating the flow of capital toward high-quality managers who effectively and transparently integrate ESG principles into their investment research process while exhibiting strong values as a firm.
"Hedge Funds have been slower to evolve and embrace responsible investing," says UBC IMANT CEO Dawn Jia. "We invest actively in this space and felt that it would be prudent to partner with a firm that was both strong in hedge fund manager selection and diligence, but also be leaders in sustainability, impact and responsible investing practices. The emphasis placed on diversity, equity and inclusion within the Titan Eclipse Fund is also aligned with our own principles. We fundamentally believe that having a diverse and inclusive team results in better decision making at every level."
UBC IMANT's ability to anchor the Titan Eclipse Fund, in addition to providing strong risk adjusted returns, is expected to yield benefits in terms of knowledge sharing that will further evolve UBC IMANT's ESG integration and responsible investing pactices across the total portfolio.
"When we looked at the hedge fund space, it was difficult to find UBC IMANT peers that had been successful in considering ESG factors when evaluating hedge fund managers," says UBC IMANT Senior Portfolio Manager, Yasir Mallick. "When we came across Titan and Flat World, they demonstrated all the qualities and attributes that we had in mind in a partner, except we had the added benefit of finding two."
Looking beyond the ESG label, the Eclipse team works on a systematic basis to identify ways that managers can further improve their ESG practices and outcomes. As part of these efforts, Titan Eclipse uses proprietary software to assess managers' alignment to material ESG and impact factors such as carbon emissions and diversity gaps.
Mallick says the combination of more than 20 years of hedge fund manager selection experience at Titan and the sustainability, ESG and impact investing experience of Flat World's two co-founders, Kate Starr and Anna-Marie Wascher, made for an impressive team that aligned with UBC IMANT's approach to manager selection, diligence, and on-going monitoring.
Established in 2001, Titan Advisors (titanadvisors.com) is a hedge fund solutions business, managing portfolios of hedge funds on behalf of institutions and high-net-worth investors. With approximately $4.9 billion in firm assets and a research team across the US, Canada and the UK, Titan is positioned to identify the most talented hedge fund managers globally. Flat World Partners (flatworld-partners.com) is an institutional advisory and asset management firm 100% focused on sustainable investments. The firm advises and oversees capital for foundations, family offices, pension plans and other institutional investors.
About UBC Investment Management Trust
UBC IMANT is the investment office responsible for managing the University of British Columbia's Endowment and Working Capital funds and the assets of the UBC Staff Pension Plan. UBC IMANT implements its investment strategy through a "manager of managers" approach, seeking out and investing in investment funds operated by the world's foremost money management professionals. As part of its Responsible Investing Strategy, UBC IMANT seeks partnerships with innovative, skilled active managers with a proven ability to integrate ESG considerations into their investment process while still meeting key performance and risk management criteria.