Temple Bar eyes sustainable future amid portfolio revamp

Shareholders had only recently rejected the idea of taking a more ethical approach to the portfolio

The Temple Bar Investment Trust board has announced it plans to take a more sustainable approach to investing, while also stepping up its efforts to replace Ninety One as manager of the value portfolio

On 20 April, ESG Clarity‘s sister publication Portfolio Adviser reported the trust’s board announced it had served Ninety One with notice of termination of the mandate and would conduct a review of the future management arrangements. This came after it was announced portfolio manager Alastair Mundy (pictured) was taking an extended leave of absence due to ill health, handing the reins to Alessandro Dicorrado and Steve Woolley who became co-managers of Temple Bar.

On 9 June the board announced: “The board has since then appointed Stanhope Consulting to conduct a review to establish the most effective management arrangements for Temple Bar Investment Trust to fulfil its objective of outperformance of the FTSE All Share index, whilst investing with a sustainable value tilt, in the changed environment of pandemic and long-term global climate change.”

Ninety One confirms intention to go for re-appointment

The board said Ninety One will be invited to participate to regain the mandate and the asset manager confirmed to Portfolio Adviser its intention to participate in the review.

It said in a statement: “Ninety One confirms its participation in the forthcoming review of management arrangements for Temple Bar Investment Trust. In the meantime, the portfolio, which has been managed by Ninety One’s value team for over 20 years, remains our key focus and our aim is to deliver strong performance and support the board where appropriate through the process.”

‘Sustainable value’ is a new concept for the trust

Association of Investment Companies head of intermediary communications Nick Britton said Temple Bar has been focused on value for a long time but the ‘sustainable value’ concept is new, noting the phrase does not appear in the trust’s latest annual report.

“However, the board has been thinking about issues of sustainability for a while and certainly pre-Covid. Last year they consulted shareholders on tobacco stocks as mentioned in the chairman’s statement in the latest annual report.”

Writing in the report, dated February 2020, Temple Bar Investment Trust chairman Arthur Copple said the board had consulted with shareholders as to whether they would support the trust declining to invest in companies whose business model was arguably unethical.

“Feedback suggested there was little support for this measure among shareholders, so at the present time the board is not proposing to change policy in this regard,” he added. “Shareholders should note, however, that the manager does not invest in certain categories of stock, such as companies involved in cluster munitions.”

Ninety One’s investment process takes ESG into account

The annual report alludes to Ninety One’s investment process taking ESG factors into account.

It said: “The manager believes that the consideration of material ESG risks and opportunities, be those material environmental, human rights, social or governance considerations, allows it to better understand risks and identify companies that are well placed to create long-term shareholder value.”

Chelsea Financial Services managing director Darius McDermott said it would be interesting to see which manager is ultimately chosen because value managers are “few and far between”. According to McDermott, groups in the frame with notable value franchises include River and Mercantile, Jupiter, Schroders, Majedie and Aberdeen Standard Investments.

“Ninety One has really been beefing up their sustainable range so they are reasonably well placed to pitch for it.”

This article first appeared on Portfolio Adviser, a publication under Last Word Media


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...