Press Release
*This Fund is not available to US investors.
With the undisputable link between carbon emissions and the frequency and severity of climate-related disasters impacting populations around the world, many investors are reviewing their portfolios’ fossil fuel exposure and considering the complex challenges that divestment presents.
With over $29 billion of funds under advice, Evans and Partners (E&P) is one of Australia’s largest wealth management firms, supporting the investment decisions of some of the country’s most discerning investors. The firm is the latest in a growing list of Australian investors to commit capital to Osmosis Investment Management’s ex-Fossil Fuel Fund. The sophisticated investment solution, first developed by the London-based sustainable manager in 2021, seeks to address the risks and unintended bets bought into portfolios from fossil fuel divestment. The Fund is distributed in Australia and New Zealand by Osmosis Investment Management’s long-term capital advisory partner in the region, Clearway Capital Solutions.
The environmentally focused Core Equity Fund was developed to protect investors from reflation in fossil fuel commodity prices and the longer-term risks of value destruction as the industry faces increasing regulatory and societal headwinds. The portfolio addresses both the supply side of fossil fuel energy generation through fossil fuel divestment and the demand side of fossil fuel energy consumption by reallocating the active divestment risk to the most highly correlated resource-efficient companies across the economy. To ensure that positive change is not penalised, a re-inclusion criterion rewards those utility companies on a meaningful transition path to cleaner energy sources (>50% revenue from renewable energy generation).
Key Features of the Osmosis Fund
- Differentiated approach excludes fossil fuel supply whilst addressing demand through the over and underweighting of Resource Efficient companies across 34 additional economic sectors.
- Strict environmental screens prohibit investment in companies with material involvement in (i.e. deriving greater than 5% of their revenues from) fossil fuels or nuclear power. The Fund also excludes companies with any revenue from controversial weapons, civilian firearms, and tobacco manufacturing and those companies in breach of the UN Global Compact Principles.
- “Transition re-inclusion” criteria rewards positive change by investing back into utility sector companies on a meaningful transition path to cleaner energy sources (>50% renewable energy generation).
- By maintaining tight country, industry, and sector weights to the benchmark the Fund addresses concerns that fossil fuel divestment products can lead to inadvertent concentration risk in certain sectors.
- Through targeting the risk budget towards resource-efficient companies on a sector-relative basis the Fund has performed in line with the MSCI World Index since its initial launch in 2021, despite unprecedented supply and demand pressures and the subsequent rally in fossil fuel prices.
- Portfolio has delivered significant reductions in ownership of Carbon (-67%), Water (-61%), and Waste (-52%) relative to the MSCI World, as at 31 July 2024.
Growth in Australian Assets
The E&P investment brings Osmosis’ ex-fossil fuel assets under management to over USD $1.6 billion (AUD 2.3 billion) and its total Australian AUM to approximately USD 2 billion (AUD 3 billion)*. Osmosis’s flagship Core Equity Range has attracted over USD 15 billion (AUD 22 billion) in assets since its launch seven years ago*. Osmosis incorporated an Australian subsidiary (OSMOSIS INVESTMENT MANAGEMENT (AUSTRALIA) PTY LTD (Australian Company Number 670 854 798) into the Osmosis group of companies last year and Australia continues to be a key focus for the firm.
*data as at 31 July 2024.
About Osmosis
Osmosis currently manages over $16bn* in sustainable assets and is headquartered in London, with a growing global presence. Osmosis believes that targeting better risk-adjusted returns and delivering significant environmental impact do not need to be mutually exclusive endeavours. Through its unique Model of Resource Efficiency, the company has demonstrated that sustainability metrics, if quantifiable and objective in nature, can be applied to mainstream equity portfolios to generate alpha.
The Osmosis team of quantitative environmental analysts and portfolio managers is singularly focused on delivering three levels of impact. Better risk-adjusted returns, measurable environmental reductions, and an active engagement programme to promote better corporate environmental disclosure.
Osmosis counts Government Pension Funds, State Pension Funds, Insurance Companies, Foundations, Endowments, Family Offices, and Banks amongst their client roster spanning the UK, Europe, the Nordics, North and South America, Asia, and Australia.
*Assets under management and advisory as of 31 August 2024.
About Evans and Partners (E&P)
Evans and Partners was founded in 2007 to provide a personal and highly attentive private wealth service. Its primary goal is to offer trusted and timely advice to its clients. With over $29 billion of funds under advice, it is one of Australia’s largest wealth management firms, supporting the investment decisions of some of the country’s most discerning investors. This clientele includes family offices, not-for-profit organisations, foundations and other high-net-worth investors.
Evans and Partners is part of the E&P Financial Group, an ASX listed business delivering financial services across wealth management, corporate advisory, institutional sales and trading and research.
If you have any questions regarding this press release, please contact Lisa Harrison at [email protected] at +44 7716 912832 (UK hours) or Dennis Mothoneos at Clearway Capital on +61 409 312 096 (AUS hours).
Important Information
This document is issued by Osmosis (Holdings) Limited, a London-based investment management group. Osmosis Investment Management UK Ltd (“OIM UK”) is an affiliate of Osmosis Investment Management US LLC (“OIM US”) and Osmosis Investment Management (Australia) Pty Ltd (“OIM AUS”). OIM UK is regulated by the FCA, OIM US is a registered investment adviser with the SEC, and OIM AUS is a corporate authorised representative of Eminence Global Asset Management Pty Ltd (AFSL 305573). Osmosis Investment Management AUM includes discretionary assets under management of OIM US and OIM UK and assets invested in model programs provided by OIM US, OIM AUS and OIM UK.
NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. The Osmosis Resource Efficient Core Equity Fund is not available for U.S. Investors. A Client’s account will be managed by Osmosis based on the Fund, but the actual composition and performance of the account may differ from the Fund due to differences in the timing and prices of trades, and the identity and weightings of securities holdings.