We aim to outperform by investing in companies succeeding in their core purpose: to generate value by creating positive and sustainable change. By meeting the underserved needs of society and the environment, these impactful businesses are directly exposed to sources of enduring demand – the beta of future growth.
A highly concentrated global equity strategy that targets companies that provide innovative solutions to society’s underserved needs, and thereby have strong growth potential.
Focused on companies exposed to the drivers of future growth, we aim to invest in future leaders rather than today’s index heavyweights.
As an essential part of the investment case for each portfolio stock, we connect their outputs with positive impacts on society and the planet, and return prospects for investors.
Our nine themes are aligned with UN Sustainable Development Goals, providing exposure to sources of future growth and supporting greater prosperity.
The Sustainable Development Goals (SDGs), an ambitious set of global objectives aiming to create prosperity for all and safeguard the planet by 2030, were created from a development rather than investment perspective. However, believing they can be a powerful way of identifying impactful companies, we created the Hermes SDG Taxonomy to clearly demonstrate connections between the goals and investment opportunities. Both precise and flexible, the taxonomy is a living piece of research targeting impact leaders – today and tomorrow.
Each theme helps us to define, validate and report on positive corporate impacts. Together, they link with United Nations Sustainable Development Goals (SDGs), an ambitious and universal set of objectives agreed by UN member states. This enables us to focus on businesses whose positive impacts are aligned with the growth drivers of tomorrow – and therefore the interests of long-term investors.
The practice of impact measurement is not straightforward: it is a multidimensional and, at times, counterintuitive art that is still evolving. As such, it does not naturally lend itself to standardisation or quantification into a single, convenient metric. We treat impact measurement according to its complexities, using a framework that prioritises these complexities over simple numbers. For insights into our impact measurement philosophy, please read our commentary.
One of the most powerful forces in investment is the compounding of returns. It is why sustainability is the ultimate objective of business and forms the core of long-term value-creation processes within companies. Reporting and measuring on impacts achieved is essential to fostering strong relationships between companies and their investors. Active and collaborative corporate engagement, therefore, is an essential part of the approach and results in better alignment between all stakeholders in a business and encourages investors to take a truly long-term perspective.
Martin Todd
co-portfolio manager - European Alpha Fund
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Martin Todd joined Hermes as a senior analyst on the European Equities team in March 2013 and is now lead portfolio manager of the Hermes Sustainable Europe strategy, and co-portfolio manager of the Hermes European Alpha Fund, Hermes Europe ex-UK Fund and the Impact Opportunities strategy. Prior to joining Hermes, he was an investment director at Scottish Widows Investment Partnership. Martin joined SWIP as a graduate and spent eight years there, primarily investing in UK equities, but also spells covering US and Japanese equity markets. Martin graduated from the University of St Andrews with an MA in Economics & Modern History and is a CFA charterholder. In 2015, Martin featured in Financial News’s ‘40 Under 40 Rising Stars of Asset Management’, an editorial selection of the brightest up-and-coming men and women in the industry.
Mark Sherlock
CFA, FCA, Lead Portfolio Manager, US SMID
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Mark joined the Hermes US Equities team in February 2009 as co-manager of the Hermes US SMID Cap strategy and became lead manager in October 2013. He was appointed as Head of US Equities in October 2017 and became co-portfolio manager of the Impact Opportunities strategy in December 2019. Mark initially joined Hermes in 2005 as an analyst and fund manager on the UK Focus Fund. Prior to this, he was an investment analyst at Rio Tinto Pension Fund, where he had responsibility for the small- and mid-cap portion of the portfolio. Mark qualified as a Chartered Accountant with PricewaterhouseCoopers in 2002. He has a degree in Politics from Durham University, is a CFA charterholder and a Fellow of ICAEW.
