BACKGROUND
I worked in the investment industry for over 20 years – and since 2010 as an advisor to large institutional asset owners across Europe. Over the past five years I focused increasingly also on sustainable and impact investments. I have sat on several investment committees and on the boards of non- and for-profit organisations.
Here you find highlights of my background, and you will find more details on the work of Maloja Advisory under Case History.
2022 – Present | IMPACT FUND EVALUATION FRAMEWORK
I developed a framework for the evaluation of impact funds along traditional financial dimensions and through the lenses of sustainable and impact investing. I treat ESG integration as a “hygiene factor”, underpinning a manager’s commitment to considering the harmful effects of their holdings. This is in line with the spirit and letter of the EU Taxonomy and Sustainability Financial Disclosure Regulation or SFDR, and the prominence of the “Do No Significant Harm” criterion. Generating a positive impact requires intentionality and the ability to add value in unique way (additionality) and it is inextricably related to reporting on the impact generated.
I developed a framework for the evaluation of impact funds along traditional financial dimensions and through the lenses of sustainable and impact investing. I treat ESG integration as a “hygiene factor”, underpinning a manager’s commitment to considering the harmful effects of their holdings. This is in line with the spirit and letter of the EU Taxonomy and Sustainability Financial Disclosure Regulation or SFDR, and the prominence of the “Do No Significant Harm” criterion. Generating a positive impact requires intentionality and the ability to add value in unique way (additionality) and it is inextricably related to reporting on the impact generated.
2022 – Present | MANAGER RESEARCH
As the backbone of my advisory activity I am involved in due diligence work, drafting reports on managers operating in different asset classes. During my time at Cambridge Associates I conducted extensive due diligence work on equity and fixed income managers for large Middle Eastern sovereign wealth institution. At Nordea, I lead research into factor investing and particularly low volatility equities and I researched liquid implementation options for alternative investments. I also advised a leading European insurance company on selection of multi-asset and credit managers with reporting systems in compliance with Solvency II. Most recently my due diligence focuses on impact funds, and particularly those investing in private equity, venture capital and infrastructure.
As the backbone of my advisory activity I am involved in due diligence work, drafting reports on managers operating in different asset classes. During my time at Cambridge Associates I conducted extensive due diligence work on equity and fixed income managers for large Middle Eastern sovereign wealth institution. At Nordea, I lead research into factor investing and particularly low volatility equities and I researched liquid implementation options for alternative investments. I also advised a leading European insurance company on selection of multi-asset and credit managers with reporting systems in compliance with Solvency II. Most recently my due diligence focuses on impact funds, and particularly those investing in private equity, venture capital and infrastructure.
2022 – Present | “DE-CARBONISING” PORTFOLIOS
While at Nordea, I looked at the effects of de-carbonising i.e., selecting companies based on their carbon footprint, and reducing exposure to the largest polluters. I reflected on whether oil stocks could follow the same path as coal stocks, which had flatlined. I concluded that – at least in aggregate – oil shares behave largely in line with oil prices, remembering that oil demand remains strong under a majority of scenarios. I should add, however, that the economics of renewable energy have improved beyond expectations over the years, and that there has been heightened investor activity around divesting and aligning portfolios with a 1.5 to 2-degree scenario. This might then lead to the longer-term underperformance of fossil fuel companies relative to the general market.
While at Nordea, I looked at the effects of de-carbonising i.e., selecting companies based on their carbon footprint, and reducing exposure to the largest polluters. I reflected on whether oil stocks could follow the same path as coal stocks, which had flatlined. I concluded that – at least in aggregate – oil shares behave largely in line with oil prices, remembering that oil demand remains strong under a majority of scenarios. I should add, however, that the economics of renewable energy have improved beyond expectations over the years, and that there has been heightened investor activity around divesting and aligning portfolios with a 1.5 to 2-degree scenario. This might then lead to the longer-term underperformance of fossil fuel companies relative to the general market.
2016 – 2018 | INTEGRATING ESG IN PORTFOLIOS
At Nordea I led a project for the integration of environmental, social and governance (ESG) aspects into the bank’s advisory model, used for private banking and retail clients and for the digital channel (robo advice). My research focused on building portfolios based on our advisory model (which was mainly predicated on Modern Portfolio Theory). The conclusion is that selecting best-in-class companies from an ESG perspective is compatible with principles of maximum diversification, and that best-in-class ESG portfolios can target the same return with the same level of risk as traditional/non-ESG portfolios.
In related matters, recent studies conclude that companies with better management of ESG outperform their peers. I believe that the evidence is not conclusive – the ESG indices used do not yet have sufficient history to draw meaningful conclusions. Many studies, however, show that integrating ESG in the vast majority of cases does not detract from or contributes to better returns (see the Oxford Arabesque meta-study). The general intuition is that considering environmental, social and governance risks results in better risk management.
At Nordea I led a project for the integration of environmental, social and governance (ESG) aspects into the bank’s advisory model, used for private banking and retail clients and for the digital channel (robo advice). My research focused on building portfolios based on our advisory model (which was mainly predicated on Modern Portfolio Theory). The conclusion is that selecting best-in-class companies from an ESG perspective is compatible with principles of maximum diversification, and that best-in-class ESG portfolios can target the same return with the same level of risk as traditional/non-ESG portfolios.
In related matters, recent studies conclude that companies with better management of ESG outperform their peers. I believe that the evidence is not conclusive – the ESG indices used do not yet have sufficient history to draw meaningful conclusions. Many studies, however, show that integrating ESG in the vast majority of cases does not detract from or contributes to better returns (see the Oxford Arabesque meta-study). The general intuition is that considering environmental, social and governance risks results in better risk management.
2010 – 2016 | ADVISORY TO ITALIAN BANKING FOUNDATIONS
These entities were created in the wake of the banking reform in 1990 (here is some history: Legislation of fondazioni bancarie). They are very prominent in the respective regions, contributing large resources also to the cultural heritage of Italy. Together with the team at Cambridge Associates, I advised two of the largest banking foundations that still owned large stakes in banks. I worked closely with the investment office on creating endowment model-like portfolios i.e., well-diversified by asset class and with sufficient exposure to growth assets to sustain spending (what is the endowment model? More here: The “Yale model”).
The key challenge was the heavy reliance on the bank’s dividend as well as the institutions’ boards conservative attitude toward risk. These two features – the dividend and risk tolerance, and particularly a desire to limit losses on any given year – informed the work. The focus was not only on asset allocation, manager selection and oversight, but also on education of the investment staff, board, and other stakeholders.
These entities were created in the wake of the banking reform in 1990 (here is some history: Legislation of fondazioni bancarie). They are very prominent in the respective regions, contributing large resources also to the cultural heritage of Italy. Together with the team at Cambridge Associates, I advised two of the largest banking foundations that still owned large stakes in banks. I worked closely with the investment office on creating endowment model-like portfolios i.e., well-diversified by asset class and with sufficient exposure to growth assets to sustain spending (what is the endowment model? More here: The “Yale model”).
The key challenge was the heavy reliance on the bank’s dividend as well as the institutions’ boards conservative attitude toward risk. These two features – the dividend and risk tolerance, and particularly a desire to limit losses on any given year – informed the work. The focus was not only on asset allocation, manager selection and oversight, but also on education of the investment staff, board, and other stakeholders.
2010 – 2016 | INVESTMENT COMMITTEE MEMBER AND ADVISOR TO UK CHARITIES
I sat on the investment committee of UK charities and foundation with assets ranging from £70 to £1bn. I supported decision making on investment planning, asset allocation, hiring and replacing managers, and oversight.
I also advised on specific topics. One charity, for example, had a tobacco exclusion i.e., had elected to refrain from any investment in tobacco companies, which they believed to be harmful. Moreover, exposure to these companies posed a reputational risk for a charity whose programmes benefitted the terminally ill, many of whom were cancer patients. This kind of exclusion might seem relatively mainstream now (there is even a large anti-tobacco initiative: UNEP Finance Initiative Tobacco Free Finance), but it generated a degree of volatility relative to market indices, posing the risk to underperform relative to the set benchmarks. Also, tobacco stocks were a source of high dividends (as are integrated oil companies). Eventually tobacco companies underperformed the general market, but this was a reminder that exclusions, particularly encompassing entire sectors, mean the institution has to be able to weather underperformance, at least at times. This is an example of early work around investor’s non-financial preferences.
I sat on the investment committee of UK charities and foundation with assets ranging from £70 to £1bn. I supported decision making on investment planning, asset allocation, hiring and replacing managers, and oversight.
I also advised on specific topics. One charity, for example, had a tobacco exclusion i.e., had elected to refrain from any investment in tobacco companies, which they believed to be harmful. Moreover, exposure to these companies posed a reputational risk for a charity whose programmes benefitted the terminally ill, many of whom were cancer patients. This kind of exclusion might seem relatively mainstream now (there is even a large anti-tobacco initiative: UNEP Finance Initiative Tobacco Free Finance), but it generated a degree of volatility relative to market indices, posing the risk to underperform relative to the set benchmarks. Also, tobacco stocks were a source of high dividends (as are integrated oil companies). Eventually tobacco companies underperformed the general market, but this was a reminder that exclusions, particularly encompassing entire sectors, mean the institution has to be able to weather underperformance, at least at times. This is an example of early work around investor’s non-financial preferences.
2011 – 2015 | KNOWLEDGE TRANSFER TO MIDDLE EASTERN INVESTORS
I led annual week-long training courses on investment oversight for a group of Gulf-based sovereign wealth funds. The course took place in London and included topics such as due diligence on hedge funds and private investments, asset allocation, and decision-making. Attendees represented a newer and promising generation of investors at their respective institutions, and the week was an occasion to learn as well as to network with experts and with each other.
I led annual week-long training courses on investment oversight for a group of Gulf-based sovereign wealth funds. The course took place in London and included topics such as due diligence on hedge funds and private investments, asset allocation, and decision-making. Attendees represented a newer and promising generation of investors at their respective institutions, and the week was an occasion to learn as well as to network with experts and with each other.