For the third year running Osmosis Investment Management (IM) has taken the Boutique investment manager of the year – Europe for its track record of delivering better risk-adjusted returns versus the MSCI World.
Over the last year, this performance led to a 70% increase in assets under management (AUM) to $15.9 billion, including $70 million from a Korean pension fund following the firm's expansion into the Asian region, as well as $250 million from a UK local authority.
Osmosis's flagship Core Equity Fund returned a cumulative 6.51% outperformance to the benchmark, MSCI World since its inception. On an annualised basis it registered an excess return of 0.52% and an information ratio of 0.59. Simultaneously, the Fund's holdings were 63% more resource-efficient than the MSCI World benchmark.
The asset manager attributes its success to its quantitative investment approach, which measures a company's sustainable actions rather than just its targets or well-meaning intentions. It believes that those companies that have effectively monetised sustainability to the balance sheet will outperform their sector peers over the long term.
Beyond carbon reduction, Osmosis's strategies comprise three levels of environmental impact. The multi-environmental factor-based approach results in a reduction in the ownership of carbon (-54%), water (-69%), and waste (-67%) relative to the MSCI World.
"Winning these awards is a testament to our 14-year commitment and dedication to try and address the complex challenges investors face when addressing the environmental footprints of their portfolios, said Ben Dear, chief executive of Osmosis IM. "It reflects the thoughtful approach we have taken to build innovative strategies that mitigate portfolio environmental risks while targeting financial returns, and it's made possible by our clients in 14 countries, who've fuelled our growth to around $16 billion in AUM."
"A strong performance coupled with innovative technology and processes to drive repeatable and resilient investment performance," commented one Sustainable Investment Awards judge, adding that "active ownership and cost transparency stands out."
Another applauded the asset manager's "constructive inflows, which ensure the narrative is efficient and compelling".
Osmosis also won the Listed equities manager of the year award. The team believes resource efficiency is an investment return signal independent from traditional country, sector, size and style factors. As a result, its strategies have been used to enhance investment portfolios without impacting existing exposures.
2023 continued to be a year of research as it completed a project into corporate environmental data in emerging markets, claiming to acquire more than double the number of carbon data points in emerging markets than some well-known third-party data providers.
It is also confident that its extensive water and waste data points give it a leading edge compared to the peer group, especially as companies and investors tend to overlook this data due to a focus on carbon.
Active ownership is another key part of Osmosis's outlook. Throughout 2023, it engaged with 324 companies and voted on 10,917 proposals in order to promote better environmental disclosure. It, in turn, believes this leads to investment in companies more likely to manage, measure and reduce their environmental impact.
