Liontrust ESG Trust Plc (ESGT) | Liontrust Asset Management PLC

Liontrust ESG Trust Plc (ESGT)

We are pleased to announce the intention to launch Liontrust ESG Trust PLC (ESGT), with the offer closing at the end of June. Please see below for which platforms you can use to invest in ESGT.

The Company will normally be invested in a concentrated portfolio of between 25 and 35 holdings in Sustainable Companies around the world with the highest sustainability scores, as determined by the Liontrust Sustainable Investment Team’s established investment process. The closed ended structure of an investment trust will enable the portfolio managers to be unconstrained by market capitalisation when selecting investments. It is expected that ESGT will have an exposure to small cap stocks that are not held by the open-ended funds they manage.

The portfolio of ESGT will be managed by Peter Michaelis, Simon Clements and Chris Foster, who are part of the 13-strong Sustainable Investment team with a 20-year track record of managing sustainable funds.

How to invest

The following intermediaries have been authorised by the Company to accept orders in the intermediaries offer. Click on the icons below for more details on how to invest.

 

AJ Bell Youinvest
 EQi Hargreaves Lansdown   Interactive Investor  PrimaryBid

Liontrust ESG Trust PLC IPO – QuotedData note

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Why sustainable investment?

Creating a cleaner, safer and healthier future
Creating a cleaner, safer and healthier future
Investing sustainably can help to tackle global crises such as climate change, pollution, habitat destruction, collapsing biodiversity and social inequality.
Performance
Performance
The last two decades have demonstrated that integrating sustainability into stock selection can enhance investor returns.1
Greater awareness
Greater awareness
An increasing proportion of investors care about how they make their money as well as how much money they make. 75 per cent. of consumers consider sustainability to be an important part of their everyday life.2 Of those who do not invest sustainably, 80 per cent. were aware of sustainable investment, showing the potential for growth.
Increasing investment
Increasing investment
Research conducted for Liontrust in December 2020 reveals that 78 per cent. of wealth managers and 71 per cent. of financial advisers have seen an increasing proportion of their clients investing sustainably over the past year.3
Growth in assets and funds
Growth in assets and funds
According to the Forum for Sustainable and Responsible Investment’s 2020 trends report, sustainable investment now represents 33 per cent. of the $51.4 trillion in total US assets under management, and the figure in Europe doubled over 2020 to hit €1.1 trillion.

Investment Manager

  • Long-track record: Peter Michaelis (Citywire AA rated) and Simon Clements (Citywire AAA rated) have been managing sustainable global growth strategies since 2001 and 2010 respectively and Chris Foster became a co-manager of these strategies in 2020.
  • Pioneers: Key members of the Sustainable Investment Team were among the pioneers of sustainable investing, being founder members of the PRI (Principles for Responsible Investment) while at Aviva and leading on issues that are now central to mainstream investing such as not owning companies exposed to diesel engines, coal and oil (in 2001) and moving to exclude natural gas (from 2016).

Investment Process

  • Distinct, rigorous and repeatable process: The process seeks to generate strong returns from investing in companies aiming to deliver profits through positive social and environmental impacts. The Sustainable Investment Team looks at the world through the prism of three mega trends – Better resource efficiency (cleaner), Improved health (healthier) and Greater safety and resilience (safer) – and then 21 themes within these.
  • Time arbitrage: By having a longer time horizon than most, the Sustainable Investment Team can patiently invest in businesses they believe have years of growth ahead and take advantage of dislocations in the market when these businesses are trading considerably below what the managers believe they are worth.
  • Engagement: This is an integral part of how the Sustainable Investment Team invests. Engaging on key environmental, social and governance issues gives the managers greater insight, helps to identify leading companies and is used as a lever to encourage better business practices.

Performance and Impact

  • Strong performance: The Liontrust SF Global Growth Fund (which has the same investment process and a similar objective and mandate to ESGT) has outperformed the MSCI World Index over one, three, five and 10 years.1 The MSCI World Index is the Fund’s comparator benchmark.
  • Investor perception: Liontrust is regarded as the best investment manager for sustainable investment among wealth managers and advisers (34 per cent.) and private investors (25 per cent.) .4
  • Impact: Since 2015, the Sustainable Investment Team has shown how its funds’ themes and investments are contributing to the UN’s Sustainable Development Goals. The Sustainable Investment Team has for many years published all holdings and the rationale for them.
  • Mitigating CO2 exposure: Compared to the MSCI World Index, companies held in the Liontrust SF Global Growth Fund emit 88.3 per cent. less carbon dioxide while 28.8 per cent. of the portfolio is invested in stocks involved in technology that directly cut carbon emissions (at 31 December 2020).

SDGs that are hard to invest in

In the interests of diversifying and to impact a wide range of environmental and societal issues, the Company’s investments will be spread across the Sustainable Investment Team’s range of 21 ESG themes which have been linked to the SDGs. However, there are some SDGs which are hard to impact through investment (SDG 1- No poverty, SDG 2 - Zero hunger, SDG 14 - Life below water and SDG 15 - Life on land). In these areas, there are currently very few opportunities to invest successfully while having a positive impact on these SDGs.

 

Management Fees and SDGs research

The AIFM is entitled to receive a fee of 0.65 per cent. per annum of the net assets of the Company. The AIFM is responsible for the payment of the Investment Manager’s fees. The Investment Manager will donate up to 10 per cent. of the management fees to fund  research identifying and developing financial instruments covering the currently Uninvestable SDGs. When these instruments are developed, they will become available for the Company and other investors. The percentage of the fees allocated to research will be at the discretion of the Investment Manager. No performance fee is payable by the Company to the AIFM.

 

Winterflood Securities Limited is acting as sponsor, financial adviser and placing agent to the Initial Issue.

 

Richard Laing, Chairman of ESGT, said: “Whether it is David Attenborough’s TV documentaries, the impact of climate change, plastic and other pollution in the sea, overfishing or the destruction of biodiversity, it is impossible not to be aware of the urgency of the action we need to take to tackle these crises. There is also an increasing recognition of the key role that investment can play in all aspects of environmental, social and governance issues, and that sustainable investing can enhance investor returns compared to mainstream funds and indices.

 

ESGT will offer an Investment Manager with more than 20 years of experience of investing sustainably, with a track record demonstrating the positive impact of their process and with a vision of the development of a sustainable world, economy and society over the next two decades.

 

Peter Michaelis, Portfolio Manager, said: “We are excited by the opportunities that ESGT offers in being able to construct a high conviction portfolio with companies from across the market cap spectrum and our sustainable investment themes. 

 

“Key attractions include the wide opportunity set it provides as it is unconstrained by market capitalisation, a concentrated portfolio focused on the highest sustainability companies and the chance to invest a portion of the portfolio in small cap companies that we do not hold in our open-ended funds. These stocks fit perfectly with our focus on the long-term drivers of the sustainable economy of the future.

 

“Looking to the long-term benefit for investors, up to 10 per cent. of the management fee we receive from ESGT will be used to fund research to identify and develop financial instruments covering those UN Sustainable Development Goals that are currently uninvestable.

 

“When these financial instruments are developed, they will become available to ESGT and other investors.

 

 

John Ions, Chief Executive of Liontrust, added: This is a significant launch for Liontrust in expanding our offering into investment trusts.

 

“The launch of ESGT recognises the growing demand for sustainable investment as an increasing number of people want their investments to make positive contributions to society, the environment and the economy.

 

“Over the past two decades, the Sustainable Investment team has demonstrated the ability of its investment process to outperform mainstream funds and the impact of its funds on sustainable development.1

1 Past performance is not a guide to future performance, investments can result in total loss of capital.

2 Source: Research in Finance, 500 consumers, December 2020

3 Source: Research in Finance, 49 wealth managers and 96 financial advisers

4 Source: Research in Finance, December 2020

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