In this inaugural report, we delve into what makes the Federated Hermes Climate Change High Yield Credit strategy unique. As well as introducing our process and team, the report provides an overview of our proprietary Climate Change Impact (CCI) score, complete with portfolio examples to illustrate the scoring system in practice.
Benefitting people and the planet: we seek to deliver into two self-reinforcing objectives – strong financial performance for investors and positive climate impacts, through decarbonisation, that contribute to the low carbon transition.
Investment expertise: since 2004, our team’s principal members have delivered attractive high yield credit returns through relative value investing across the capital structures of companies worldwide.
Engagement strength: our dedicated engagers, supported by EOS at Federated Hermes, a leading global stewardship team, seek positive climate action.
Measuring climate impact: our proprietary scoring framework (outlined in more detail in a later section of this report) allows us to assess a company’s current and expected contribution to decarbonisation and the transition to net zero by 2050.
The views and opinions contained herein are those of the author and may not necessarily represent views expressed or reflected in other communications. This does not constitute a solicitation or offer to any person to buy or sell any related securities or financial instruments
Nachu joined in March 2018 as a portfolio manager within the Credit team. She is co-portfolio manager of the SDG Engagement High Yield Credit strategy and the Climate Change High Yield strategy, as well as the sustainable portfolio manager for our range of flexible credit strategies. She joined from Ontario Teachers’ Pension Plan, where she was a portfolio manager responsible for the plan’s active investments in emerging markets and European credit. Nachu started her career at JPMorgan in London as a sell-side analyst where she spent 13 years covering, firstly, European high yield and investment grade and then CEEMEA credit. Nachu graduated from the London School of Economics with a degree in Economics and is a CFA charterholder.
Bertie joined in 2020 as an associate for the Fixed Income team. In his role, he supports our engagement and fund management efforts across climate and sustainability-themed fixed income products. Previously, he worked at BlackRock and the Foresight Group, where he learnt to use ESG analysis in sustainability-related fund management. He also worked with the Reserve Bank of India in its Pune Institute, researching the prospects and challenges of microfinance in India. Bertie graduated with a first-class BA (Hons) in Economics and Business Management from Newcastle University and has passed the CFA Certificate in Climate and Investing.
CFA, Head of Fixed Income – Public Markets, Federated Hermes Limited
Fraser joined in February 2010 and is Head of Fixed Income – Public Markets and lead manager on the range of credit strategies. Based in London, he is responsible for leading the strategic development of the Credit platform and investment teams, offering solutions accessing all areas of the global credit markets. Prior to this, he was at Fortis Investments, where he was responsible for European High Yield. Fraser graduated from the University of Aberdeen with an MA (Hons) in Economics; he earned an MSc in Investment Analysis from the University of Stirling and is a CFA charterholder. In 2017, Fraser joined the board of CFA UK, a member society of the CFA Institute, where he also sits on their Sustainability Steering Committee, as well as the Professionalism Steering Committee overseeing the society’s advocacy and thought leadership work. He has previously featured in the Financial News’ ‘40 Under 40 Rising Stars of Asset Management’, an editorial selection of the brightest up-and-coming men and women in the industry, and was also named as one of the top 10 star fund managers of tomorrow by the Daily Telegraph. Other notable accolades have come from Citywire Americas, which named Fraser number one in their global high yield manager review, and InvestmentEurope and Investment Week, which both named the Federated Hermes Multi-Strategy Credit Fund top global bond fund at their respective 2017 Fund Manager of the Year Awards.
CFA, Head of Sustainable Fixed Income, Federated Hermes Limited
Mitch joined in February 2010 as Head of Research on the Credit team before becoming Co-Head of Credit from 2012 to 2019. In 2019, in addition to his role of Head of Research, he became Head of Sustainable Fixed Income and co-manager of the Federated Hermes SDG Engagement High Yield Credit Fund. Prior to this he was Co-Head of Credit Research for the global credit team at Fortis Investments. Other roles at Fortis include portfolio manager of European high yield funds, based in London, and senior credit analyst, based in Paris. Before this he worked as an associate analyst in the leveraged finance group at Moody’s Investors Service in New York. Mitch earned a Master’s degree in International Affairs at Columbia University in New York City and a Bachelor’s degree in History at Pitzer College, one of the Claremont Colleges in California. He is a CFA charterholder and the founder and Co-Chair of the Federated Hermes Sustainability Investment Centre. Among his current and former advocacy roles are: founding member of the Executive Committee for the European Leveraged Finance Association (ELFA); Co-Chair of the Credit Risk and Ratings Advisory Committee at the Principles for Responsible Investment (PRI); workstream member CFO Taskforce for the United Nations Global Compact (UNGC); member the Target Setting workstream at the Institutional Investors Group on Climate Change (IIGCC); Technical Working Group (Communications and Technology) for the US-based Sustainability Accounting Standards Board (SASB); (former) Co-Chair of the Capital Markets Advisory Committee of the IFRS Foundation; (former) member of the Sovereign Working Group (PRI); (former) workstream member of the UK-China Green Finance Task Force; and (former) Green Finance Advisory of the City of London.
Sophie joined in September 2021 as an associate for the Sustainable Fixed Income Team. In her role, she supports our engagement and fund management efforts across climate and sustainability-themed fixed income products. Previously, she worked as a summer intern at the impact investment manager, BlueOrchard Finance, where she supported the firm's Blended Finance & Impact Management and Communications teams in Zürich. She has also completed internships at Ortec Finance, FRORIEP Legal and Syngenta Foundation for Sustainable Agriculture. Sophie graduated with a first-class BA (Hons) in Philosophy, Politics and Economics (PPE) from Durham University. She wrote her undergraduate dissertation on the impact of microfinance programmes on women's empowerment in Bangladesh, and participated in the university's Sustainable Finance Society as an ESG Research Analyst.
Spectrum Q2 2022: Investing into the aluminium paradox
In this latest edition of our quarterly Spectrum report, experts from Federated Hermes consider the question of aluminium. The lightweight metal will play a crucial role in the energy transition but will need to address its own carbon footprint first.
At Federated Hermes we believe the investment industry can be a powerful force for good, building a fairer, more equitable world for all – and that active ownership and engagement is the best way to achieve this. In this, our second annual Stewardship Report, we provide an update on our efforts towards effective and outcomes-driven stewardship.