Page 46 - DIY Investor Magazine - Issue 25

Talking responsible fixed income and rainbow washing with... Simon Bond, Director of Responsible Investment Portfolio Management, Columbia Threadneedle Investments and Richard Romer-Lee, Managing Director at Square Mile.
HOW DID YOU GET INTO FUND MANAGEMENT?
It was not planned! I started as a trainee accountant in a local office, which led me to investment accounting at Hambros Bank. I worked for Peter Hill-Wood, then Chairman of Arsenal. He organised parties at Highbury, which I enjoyed despite being a Tottenham Hotspur fan.
I transitioned towards fund management, initially as a desk assistant for equity fund managers but also doing admin for David Tapper’s bond desk. I was young, enthusiastic and asked
all manner of stupid questions to learn as much as possible.
I moved to Provident Mutual after my experience at Hambros of Big Bang and the ’87
crash to support the bond desk. I became an analyst in 1991 and the first credit I analysed was issued by the Peabody Trust
Housing Association – the legacy of George Peabody. That gave me the idea that the hard-nosed financial world could have
some benefits for society.
WHAT WAS THE ATTRACTION OF BECOMING A BOND INVESTOR?
Given my name it was that or become a spy! I am curious and back then bonds, unlike equities, were unknown– a dark art – and I wanted to find out more. Fast forward to 2013 when we had our first meeting with The Big Issue. They wanted an investment product to which they could direct people that shared their values and provided for long-term societal needs. The idea was developed with their eight areas of social outcome in mind and the
Threadneedle Social Bond Fund was born.
Square Mile
Talking With
HOW DO YOU MAKE SURE YOUR INVESTMENTS HAVE IMPACT?
With the way we invest, predominantly targeting the primary bond market, we can follow the money through to the point of impact, which occurs where and when the money is spent. Bond investors typically don’t have the same level of access to company management as equity investors. However, when companies want to borrow money through the primary market, when they are issuing bonds, this provides us with the best access and enables us to have the conversation about achieving impact and alignment
of interest. We can benefit from covenants which control where the money can be spent
(Green Social and Sustainability Bonds, for example).
To read more Talking Withs visit squaremileresearch.com/Insights/Talking-With
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WHAT MAKES A GOOD FUND MANAGER?
I look for the same things in people I employ or the management of companies in which I invest. Is their heart in the right place?
I like to see the whites of their eyes, which are a window into their culture. I look for enthusiasm, curiosity, passion and doing things for the right reasons.
HOW DO YOU DEFINE HOW YOU INVEST?
ESG investing is “doing the thing right”. Impact investing is “doing the right thing”. It’s about the effect of the business on, community, society and economy. I ask questions people are not expecting – about their employment practices, such as how they look after their more vulnerable employees, or the terms of their outsource contracts if that’s how they work. It can be about the smaller details. For example Manchester Airport filters water that drains off the runway and builds tunnels underneath the tarmac to protect the wildlife.
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