Download - Oxcel, Part of the Solution
Oxcel, Part of the Solution
Colin Cheng Thomas Saleh
Marko TvrtkovicBeatrice Yeung
Introduction Analysis Recommendation Conclusion
Agenda• Introduction
• Problem Statement
• Situational Analysis
• Criteria Definition
• Alternatives
• Recommendation
• Conclusion
• Questions and Answers
Introduction Analysis Recommendation Conclusion
Problem Statement
• Should Oxcel devote their funds to socially responsible investing, if so, which investment option should the endowment support, given the financial limitations?
Introduction Analysis Recommendation Conclusion
Situational Analysis• Full consideration of all
three pillars – Environmental, political, socio-economic
• Ecology as a framework for social existence
Polit
ical
POLITICAL
VALUES TO BE INTERGRATED WITH RESPONSIBLE INVESTING
Introduction Analysis Recommendation Conclusion
Criteria Definition• Intergenerational Equity
– Future generations should have the same access to resources and ecological services that current generations enjoy
• Modes of Development – Based on shared prosperity and environmental
protection
Giving voice to the voiceless – the unborn
Introduction Analysis Recommendation Conclusion
Alternatives - Funds
1. Abbe SRI• Not 100% aligned with socially responsible investing
2. Winslow Green Growth• Theme based approach to investing• Focus on domestic, small-cap companies
– High risk, high reward– More adaptable– More direct impact
• Green Mountain Coffee
Introduction Analysis Recommendation Conclusion
Alternatives - Funds3. Calvert Social Investment Equity Fund
• Triple bottom line approach• Focus on domestic, large-capitalization companies• More diversified investment portfolio
– Lower risk– Multi-facetted investment process
• Holdings:– Pharmaceuticals and smaller companies such as Ecolab or
the Vermont Sustainable Jobs Fund
Introduction Analysis Recommendation Conclusion
Alternatives – Decision Matrix
Funds/Criteria Performance Values Managers Structure
Abbe SRI + 0 - -
Winslow Green Growth 0 ++ + -
Calvert Social Investment
Equity+ +++ ++ ++
Introduction Analysis Recommendation Conclusion
Recommendation: Why Calvert?• The structure of the Portfolio
– Diversity – Aligns with Goal of the Endowment – Best Encapsulates our definition of Sustainable Investing
• Performance relative to Other Funds– Best Previous Performance Performance: Lower Volatility (Variance 1.5 compared to 7.3)
• Performance relative to Benchmark– Outperforms S&P 500
Introduction Analysis Recommendation Conclusion
Fund Performances
October 2006- September 2007 October 2007- September 2008 October 2008- September 2009
-4
-3
-2
-1
0
1
2
3Year by Year Performance
Calvert
Winslow
Abbe
Introduction Analysis Recommendation Conclusion
Calvert versus S&P 500
October 2006- September 2007 October 2007- September 2008 October 2008- September 2009
-2.5
-2
-1.5
-1
-0.5
0
0.5
1
1.5
Year by Year Performance
CalvertS&P 500
Introduction Analysis Recommendation Conclusion
Fund Manager & Future Outlook• Fund Manager
– Experience: Richard England (MBA 20+ years of experience)William Hackney III (Employee since 1995, MBA)
– Total Exp. Ratio = 0.67% – Advisor Fee = 0.60% – Turnover Ratio = 51%
• Future Outlook – Calvert’s Approach: Best Captures the multi-faceted approach to
sustainability– Market Uncertainty
Introduction Analysis Recommendation Conclusion
Further Reasoning• Transparent and Accountable
– Corporate environmental, social and governance disclosure (on both policy level initiatives and company engagement)
• Multi-dimensional – Incorporates political, socio-economic, and environmental pillars
• Inclusive – Governance and Ethics, Workplace, Environment, Product
Safety and Impact, International Operations and Human Rights, Indigenous Peoples’ Rights, and Community Relations
Introduction Analysis Recommendation Conclusion
Further Reasoning
• Mobilize resources; Connect with stakeholders – Engage companies to improve behavior
• Innovative – Identify new untapped opportunities with potential
Transitions corporate culture to one that finances the future
“Be Part of The Solution”
Introduction Analysis Recommendation Conclusion
Recommendation & Innovation
Invest in Socially Responsible Entrepreneurship
• Inline with Values– Investing in Local Human Capital– Gives Younger Students a Voice– Financing Future Generations
• Minimize “Principle-Al agent”– Students have vested interests and are motivated
Introduction Analysis Recommendation Conclusion
Conclusion
Sustainability can be profitable
Aligning with your valuesCommon Opinions
Redefine Responsible Investing
Invest in Green Funds
Invest in Ideas of the Future
Introduction Analysis Recommendation Conclusion
Questions and Answers