Asset Manager Conference

KENFO Investment Committee Meetings November 17 - 19, 2020

In November 2020, KENFO invited its asset managers to the "Annual Asset Manager Conference 2020". As part of this conference the KENFO held its yearly investment committee meetings with the mandated asset management companies of the portfolio. KENFO requires ongoing monitoring and special quality assurance of its mandated asset managers. 

In addition to the performance and strategy review, which naturally focused this year on the economic impact of the COVID-19 pandemic, KENFO also deals with long-term investment topics and trends. This year's topics were climate change, sustainable investing and the developments in the technology sector. 

David Toms, Director of Research at Hg Capital, gave a specialist lecture to KENFO employees on the impact of the COVID-19 pandemic on the technology sector and markets in general. According to his presentation, the COVID crisis has accelerated existing trends as if magnified through a burning glass to such an extent that developments usually lasting five years have condensed into five weeks. Regardless of this, technological development have already – also in conventional and technology-remote industries – brought considerable market growth due to the ease of use of digitized business processes. The use of cloud computing is now making for real quantum leaps in growth rates in the software industry, which was particularly intensified again in the COVID crisis.

The presentations on climate change and sustainable investment were also attended by members of the Board of Trustees, the Investment Council, the legal supervisory authority and representatives of the asset management companies. Interesting perspectives were also brought up by the following two speakers, who were active participants in the UN Paris Climate Conference 2015. 

The founding director of the UN Global Compact, Georg Kell, highlighted positive development perspectives for sustainable investing. Over a career stretching back more than 25 years at the United Nations, the former high-ranking United Nations official in the UN Secretary-General’s office has also headed the conception and launch of the Global Compact's sister initiatives, such as the Principles for Responsible Investment (UN PRI). Georg Kell described the technological and political conditions within the limited planetary resources, which are difficult to grasp with human senses and are changing at a rapid pace. According to his view digitization and the fundamentally threatening effects of human activity on the environment, such as the man-made climate change, are key drivers of a changing world. With regard to ESG ratings and their underlying data quality, he acknowledges room for improvement. However, he deems ESG ratings as being on the right track and stresses their continuous improvement. Moreover, Kell considers the COVID-19 pandemic as an accelerator of technological development and entrepreneurial transformation processes, since major changes are easier to implement in a crisis situation. In his opinion, the significantly increasing share of intangible assets in corporate balance sheets are a good indicator for the growth of technology-based business models. With regard to climate change, Kell assesses the cooperation between the United States and China as essential to achieve international progress. He was optimistic about of the changing political situation in the USA. Kell also calls for better cooperation among European countries, which he sees as leaders in climate change regulation.

A highlight of the event were the remarks of Nobel Prize winner and former US Vice President Al Gore on climate change and the US election, after the election results were announced just a few days ago. Gore, 45th Vice President of the United States from 1993 to 2001 under President Bill Clinton and the US Democrat’s candidate in the 2000 presidential election, is the author of numerous publications on environmental protection and a global speaker on man-made global warming. Particularly noteworthy is the documentary film “An Inconvenient Truth”, which won two Oscars in 2007. Al Gore appeared optimistic and very confident that the new American administration will not only rejoin the Paris Climate Agreement, but will also play an active and strong role together with its European partners in solving the climate crisis and providing an economic stimulus for infrastructure and green energy. Gore also sees the transition from conventional energy generation and infrastructure to renewable energies as an important driver in the creation of numerous jobs worldwide. He compared the current speed of digitization with the magnitude of the changes brought about by the industrial revolution.

The event was concluded by a presentation by Dominique Senequier, President of the private equity company that she founded in 1996 as a spin-off from Axa Insurance and which has been operating as "Ardian" since 2013. Ardian is one of the European market leaders and has been developed into a global asset manager for unlisted companies. For Dominique Senequier, the commitment to ESG criteria is an act of solidarity with society as a whole and fits her understanding of looking beyond one's own interests. Ms. Senequier was convinced that responsible investing not only improves performance, but also brings significant non-financial benefits. In the ESG context, her company sets priorities in the areas of climate, diversity, equal opportunities, profit sharing as well as responsible corporate governance and ethics. Since 2008, she has not only shared profits generated by company sales with 24,500 employees of 33 portfolio companies but also established an employee-controlled company with more than 80% of Ardian’s 500 employees being shareholders and owning a total of more than half of Ardian's share capital. The Ardian Foundation, which she established in 2010, supports talented children and young people from disadvantaged families. Ms. Senequier is regularly ranked among the most influential people in finance, including being among the top 15 most powerful women in the world in 2020, according to the Forbes Magazine.