Professional Pensions spoke to BNP Paribas Asset Management head of sales Philip Dawes as part of an exclusive series of interviews with some of the finalists and winners of the UK Pensions Awards. This is what he had to say…
What have been your main achievements as an organisation over the past 18 months?
Over the past 18 months at BNP Paribas Asset Management (BNPP AM) we have continued to evolve our global sustainability strategy, which is focused on enhancing environmental policies, facilitating the energy transition and inclusive growth. We have also launched or reconfigured several thematic funds and impact investing strategies to benefit from these themes. These include our UK SME lending strategy, the energy transition fund and the EARTH (environmental absolute return thematic) fund, a long/short equity strategy focused on environmental solutions.
More specific to the UK, we launched our diversified private credit mandate for NEST, allowing eight million members to benefit from open-ended access to ESG-compliant investment in private assets including infrastructure, real estate, corporate loans and SME lending. We have also continued the evolution and application of our approach to cash-flow driven investing as well as equity risk hedging.
What do you believe sets you apart from your peers and contributes to your successes?
At BNPP AM our commitment to sustainability goes beyond just being integrated into the way in which we manage assets; it permeates our entire business and its ethos, as well as extending throughout the broader BNP Paribas Group. Our sustainability centre, responsible for the development of our global sustainability strategy (GSS), sits at the core of our business driving a better future for us and our clients. The launch of the GSS in March 2019 has been instrumental to the recent continued development of our business, including the development of our thematic and ESG-focused active and passive solutions across equities, fixed income, alternatives and multi-asset.
We are also focused on developing innovative and bespoke solutions for clients, drawing upon the capabilities of our multi-asset & quantitative solutions (MAQS) team as well as the broad range of asset management capabilities we have within our private debt & real assets (PDRA) group - offering clients diversified private credit and CDI portfolios. The expertise within PDRA has enabled us to offer access to ongoing innovations such as sustainability-linked social housing and energy transition solutions, as well as co-investment and privileged access to loans (infrastructure, real estate and corporate) originated by BNP Paribas' investment banking teams.
How has your business dealt with the challenges of Covid-19?
The financial strength of the BNP Paribas Group has offered stability and a safe harbour in uncertain times. As with most financial institutions, BNP Paribas has further embraced technology in order to sustain remote working for almost 200,000 employees across 71 countries (including 9,300 staff in the UK across 21 locations). The successful achievement of this has ensured that we have been able to maintain our high standards of client servicing.
We have increased our digital media marketing activity and engagement with clients further, including twice weekly market updates, webinars, virtual conferences, investment academy product specific workshops and our ‘investigator' series examining the ‘great instability' and post-Covid investment themes and opportunities.
Covid-19 has merely reinforced the importance of our social contract and sustainability policy, with renewed focus on the UK's energy transition and economic development post-Covid. Our ESG-oriented approach to private credit has also led to a focus within infrastructure and commercial real estate portfolios on renewable energy, data centres, fibre optic networks and logistic centres whose business models have benefitted from Covid, peak oil demand and energy transition. With dislocation in some private markets it has also been crucial to maintain credit and pricing discipline in the interest of our clients.
What are the key challenges facing your pension scheme clients at the current time and how are you helping them address these issues?
The continued financial repression has left pension schemes facing negative real interest rates within matching portfolios, necessitating a shift to private credit in order to deliver sustainable returns for members. Equity protection strategies are also allowing investors to cope with continued market volatility within growth portfolios.
The development of our diversified private credit strategy allows DC pension schemes to benefit from private markets allocation, offering them enhanced returns relative to publicly listed equivalents at lower volatility.
Accessing and developing new and innovative investment solutions is key in helping clients navigate climate change risks, impact investing, environmental challenges and the energy transition.
How will you continue to improve your services to pension scheme clients over the coming year?
We will continue to develop and enhance new strategies in collaboration with the BNP Paribas Group, being mindful of our desire to ‘build-back-better' post-COVID. We recognise the importance of capital markets and financial markets in shaping both society and the wider real economy, drawing upon our expertise in capital markets, asset management and security services.
We will also continue to broaden the distribution of private market opportunities across the UK pensions landscape.
Finally, we will continue to enhance our ESG approach and reporting of key metrics (and UN SDGs) to clients across equities, fixed income, multi-asset and alternatives, as well as continuing to engage on policy, taxonomy and stewardship to raise ESG standards across the industry.
More than ever, we are determined to make a real life difference in everyone's lives, with the priority of delivering long-term sustainable investment returns for our clients.
BNP Paribas Asset Management was shortlisted in the DC Investment Innovation of the Year; Cashflow-driven Investment (CDI) Manager of the Year; Alternative Investment Manager of the Year; and Retirement Innovation of the Year categories of this year's UK Pensions Awards. Find out more about the awards here.
Contact and Corporate Details
BNP Paribas Asset Management UK,
5 Aldermanbury Square,
Tel: 020 7595 2000
Email: [email protected]
Disclaimer: BNP Paribas Asset Management doesn't provide any formal capital guarantee of the funds. No information given or any term used herein shall be interpreted to provide such a guarantee. Investments are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay, the strategies described being in risk of capital loss. There is no guarantee that the performance objective will be achieved. Past performance or achievement is not indicative of current or future performance.