Impact Opportunities Equity

Backing tomorrow's winners, today

Reasons to invest

Conviction

A highly concentrated global equity strategy that targets companies with strong growth potential

Unconstrained

We aim to invest in future leaders rather than today’s index heavyweights, resulting in a strategy with a high active share

Investing in solutions

Each portfolio stock provides a product or service that helps to resolve an unmet need of society or the environment

Proprietary impact database

We believe quantitative impact metrics are vital to create accountability and allow investors to monitor, engage and report progress

Impact themes

Our nine themes are aligned with the UN’s Sustainable Development Goals (SDGs), providing exposure to sources of future growth and supporting greater prosperity

Engagement

We engage with impactful companies, developing dialogues that strengthen and sustain our impact in a positive feedback loop

Strategy overview

Ingrid Kukuljan

We are patient capital investors seeking to capture opportunities created by megatrends, investing in companies that create positive, sustainable impacts and have the potential to provide strong long-term investment returns.

Ingrid Kukuljan
- Lead Portfolio Manager

Why Impact Opportunities?

Climate, technological, demographic and geopolitical transitions could dramatically change the way we all live. This Strategy offers a way to support delivery of a more resilient and sustainable world, and investors have an important role in managing these transitions.

While we see ESG factors as materially important, this strategy goes beyond ESG risk mitigation. We believe superior growth can compound over time when we invest in companies providing innovative solutions to tackling the unmet needs of society.

We are not aiming to generate value in addition to making an impact; we are aiming to generate strong financial returns because the companies we invest in have a positive and sustainable impact on society and the environment.

How we invest

High conviction
Intensive research
Unconstrained

Investment philosophy

To generate value by investing in companies that create positive, sustainable change.

We believe:

  • Creating a more equitable and resilient world is no longer a fanciful notion, but an imperative for the health of our ecosystem.
  • Companies providing products or services that help to solve unmet needs of society or the environment are exposed to sources of enduring demand and, therefore, secular growth opportunities.
  • Short-term focus of markets leads to large inefficiencies in pricing long-term change. A time horizon of over five years enables us to capitalise on market inefficiencies and the power of compounding

Investment process

The team builds a watchlist of potential candidates for inclusion via thematic research, company meetings and internal discussion. By identifying megatrends that require impactful solutions, the team can unearth companies that are exposed to structural growth opportunities.

For a company to be considered for inclusion, it must provide positive impact towards at least one of the team’s nine themes, which are based on our SDG Taxonomy:

  1. Energy Transition
  2. Circular Economy
  3. Water
  4. Health and Wellbeing
  5. Education
  6. Financial Inclusion
  7. Future Mobility
  8. Food Security
  9. Impact Enablers.

Impact assessment

Impact opportunities equity investment process infographic

The financial appraisal of a company is equally important to our investment process as our impact assessment. This assessment is crucial to understand and ensure the stability of a company’s business model, financial position and ongoing management. We look at a company’s income statement, balance sheet and cash flow statement to assess the construction of the accounts, how they have changed and how they could continue to evolve in the future. Cash flow modelling is also used alongside peer comparison to help assess the investment opportunity provided by a stock.

The strategy targets 30-50 stocks held with high conviction. Each stock should offer the potential for exciting long-term growth, as a result of a clear purpose that addresses unmet needs in society, and be attractive from a valuations perspective. The portfolio is built, therefore, in absolute terms and without reference to an index.

Team

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Caroline Cantor

Caroline Cantor, CFA

Investment Director, Federated Hermes Limited

Martin Todd

Martin Todd, CFA

Portfolio Manager, Sustainable Global Equity, Impact Opportunities, Federated Hermes Limited

Ingrid Kukuljan

Ingrid Kukuljan

Head of Impact & Sustainable Investing, Federated Hermes Limited

Towards sustainability
3D investing
Giin member
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Product Information

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Insights

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Our Purpose

To deliver Sustainable Wealth Creation

Like all our investment capabilities, Federated Hermes Impact Opportunities aims to deliver Sustainable Wealth Creation: the generation of wealth through investments that enrich investors, society and the environment over the long term.

Our business provides three equally powerful pathways to achieving this aim. Federated Hermes Impact Opportunities features in the Impact route.

Active ESG on blue background

Responsible, active investing for long-term performance.

Sustainable on green background

Thematic and values-based approaches for sustainable outcomes.

Impact on orange background

Mission-led investment strategies to create positive impact.

Federated Hermes
Impact Opportunities Equity