Parnell, Auckland 1151, New Zealand
Services : Strategies
Since 2014, Covisory Holdings has offered its clients value-added investment solutions. Despite the fact that since our inception, our investment strategies, clients, and assets have all increased significantly, there are a few guiding principles that have remained constant. These are what we refer to as our guiding principles:
Following these guidelines has been beneficial for us, and we think it’s the secret to generating long-term client satisfaction and, as a result, to our success as a firm. These principles guide our approach to responsible investing, from the investment strategies we recommend to clients to the way our company operates.
We employ a team-based approach when implementing responsible investment for our investment strategies, keeping with our team-based approach to all investment processes. Members of our Strategy Investment Research, Investment Analytics & Data, Investment Stewardship, and Portfolio Management teams put in a lot of work to conduct responsible investments. Our Head of Responsible Investment works with these various groups to organize ESG activities. With a dotted line to one of our Co-CEOs, the Head of Responsible Investment reports to our Global Head of Portfolio Management.
Our investment strategy is grounded in the idea that prices on liquid capital markets accurately reflect all information that is available to the general public. Information on a portfolio company’s strategy, financial and nonfinancial performance, risk, capital structure, social and environmental impact, and corporate governance are just a few examples of what is covered. As a result, we think that the prices of securities reflect the overall risk and return expectations of investors and that prices are driven toward fair value by competition among market participants.
Despite the fact that we think market prices do reflect a company’s ESG policies, we also think that ESG standards can be used to reduce risk and/or boost investment returns for our clients. Particularly, we think that: ESG factors should be incorporated into portfolios to manage risks. Additionally, investment managers should carefully integrate ESG where clients want investment solutions that also aim to achieve quantifiable ESG outcomes so that the loss of diversification brought on by ESG considerations does not significantly affect expected returns.
ESG investment processes and strategies By incorporating ESG factors broadly into all of our investment strategies and by providing specialized equity and fixed income strategies that aim to achieve particular ESG-related outcomes, we reflect the aforementioned ESG beliefs. ESG factors are incorporated into our investment processes for risk management purposes. We begin by creating our portfolios using the following principles of investing:
1) Targeted return drivers backed by solid research;
2) Diversify among issuers, industries, and nations as appropriate;
3) Daily price information should be taken into account, and portfolios should be systematically implemented by carefully balancing expected returns, costs, and risks.
We actively look for opportunities to make a difference by collaborating with regional organizations as well as organizations from across the industry as part of our commitment to the communities that we serve and in which we operate.
We also kept increasing our participation in and support of a number of industry programs that target underrepresented talent outside of local organizations. This might be done through particular universities, like the Women in Investing Conference at Cornell or the Women in Investment Management at Chicago Booth. The Robert S. Toigo Foundation, for example, focuses on the professional development and increased leadership of underrepresented talent in the financial services sector. Since 2013, we have collaborated with the Toigo Foundation. Along with taking part in Toigo’s spring Catapult event every year, Covisory Holdings has also hosted Toigo’s flagship annual leadership conference, the Fall Apex, in 2014, 2016, 2019, and is currently in discussions to host in 2021.
Along with the investments we make on our clients’ behalf, we also work to enhance the operation of the investment sector. Among other things, these efforts include collaborating with regulators to enhance market mechanisms, promoting transparency, as well as defending our clients’ interests all throughout the investment process. In an effort to contribute to the improvement of market mechanisms, we have frequently provided regulators with input.
For instance, we vehemently opposed the proposed practice when the U.S. Securities and Exchange Commission (“Commission”) requested feedback on a pilot program for wider bid-ask spreads for small-cap issuers. The Commission ceased the proposed changes after the pilot program because it realized that smaller bid-ask spreads ultimately benefited investors.
Covisory Holdings is a global investment firm managing diverse fund strategies, prioritizing client interests, research-driven investments, and long-term growth.
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