The United Nations Principles for Responsible Investment (UNPRI) wants to hear from investors about methods for ensuring their portfolios are positioned for long-term investing.
In a consultation paper entitled “Long-Term Mandates” the organisation sets out a series of questions intended to identify investors’ attitudes to a range of considerations in their portfolios. Its aim is to create a best practice framework, focussing on public market equities, which can be implemented by investors around the globe.
The move is the latest by investor and business organisations to square the circle of long-term investing in an increasingly short-termist market.
The policy and research steering committee for the UNPRI’s project includes staff from large international long-term investors, including California Public Employees’ Retirement System, Caisse des Dépôts et Consignations, Cbus Superannuation Fund, APG, Environment Agency Fund, and British Columbia Investment Management Corporation.
The consultation asks investors to consider their own stated investment beliefs and how they are translated when choosing and engaging an investment manager. It asks how they monitor behaviour of their manager, once on contract, to ensure they are keeping within the required parameters, and how they track performance, costs, and other elements, such as turnover, which can affect their long-term position.
“Do you have experience of implementing long-term equity mandates?” the UNPRI asks. “What worked? What didn’t work? What internal and external barriers did you face in implementing long-term mandates? As a long-term investor, what additional considerations would you recommend? Does your approach differ for other asset classes, for example, fixed income mandates? What can public market mandates learn from private market investment structures?”
Investors are also asked to consider the make-up of their portfolios, in terms of concentration of securities, and whether a fund being active or passively managed makes a difference when aiming for a longer-term horizon.
The UNPRI also wants to know if there are any regulations that investors think impede or promote long-term investing, and what the barriers are to engaging with the policy-makers who could encourage it.
The consultation is open until September 12 and the full document can be found on the UNPRI’s website.
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