River and Mercantile (R&M) has today announced that it is launching two new sustainable equity funds – the R&M European Change for Better Fund (SFDR Article 9 compliant), managed by James Sym, and the R&M Global Sustainable Opportunities Fund (Article 8 compliant), managed by William Lough.

Both strategies will follow R&M’s Sustainable-PVT (S-PVT) investment philosophy, which incorporates sustainability into the team’s long-established process, looking at Potential, Valuation and Timing.

The team at R&M believes there is a requirement for investors to focus on decarbonising currently high polluting activities and industries that society relies upon heavily, both now and in the future, such as construction and travel. These are the investments that can make a positive and demonstrable change for good.

Leading UK multi-asset investment provider, Quilter Investors, has committed seed capital, via its Cirilium Active portfolios, in support of R&M’s distinct approach.

Paul Craig, portfolio manager of Quilter Investors’ Cirilium Active range, commented: “These new funds represent a great diversification opportunity for our clients. We are impressed by R&M’s differentiated approach to sustainable investing which avoids the typical ESG ‘darlings’, and consequently offers a strong alpha-generating opportunity. We have been a supporter of R&M for a number of years and are pleased to extend this successful relationship.”

Simon Smith, Head of UK Wholesale Distribution at River and Mercantile, added: “Paul and the Quilter team have been extremely supportive of the funds’ sustainable objectives and we’re delighted that our proactive philosophy clearly resonates with investors. We believe our truly differentiated approach will generate returns and improve wealth through responsible investment that actively promotes positive societal and environmental change.”

James Sym, Head of Equities at River and Mercantile said: “We want 2022 to be remembered as the year that the asset management industry started doing ESG properly. We will be investing in companies which we expect to make a big improvement in their carbon footprint, as well as those companies which enable this improvement for others. This fits well with our contrarian and valuation-orientated mindset. We are looking to buy tomorrow’s ESG stars at yesterday’s valuations.”

William Lough, Portfolio Manager at River and Mercantile, added: “We believe these funds will make a real-world difference, offer attractive diversification benefits for investors and tap into return drivers which have a long shelf-life. Combined with the opportunity to drive change through engagement, this is truly active value investing for the 21^st century.”