RobecoSAM, a Zurich-based pioneer in sustainable asset management, has its sights set on China as a market for both investments and investors, as it gets set to merge with Japan’s Orix Corporation.
“With Orix as our new shareholder, we hope to create a new home base in the region,” says RobecoSAM chief executive Michael Baldinger, during a recent visit to Hong Kong. “China, and the rest of the Asia, is one of the most interesting markets for sustainability investing.”
In February, it was announced that financial services group Orix will acquire a 90% stake in Robeco for €1.9 billion ($2.5 billion) from owner Rabobank. Expected to be finalised later this year, the deal will put RobecoSAM under the umbrella of Orix.
RobecoSAM has about $11.5 billion in assets under management, advisory and licence. Some $1.2 billion of the total is in global private equity, comprising two clean-tech fund-of-fund programmes, and another two divisions focused on small and medium-sized enterprise PE markets in resource-constrained industries such as energy, water, food and agriculture, and sustainable materials.
Originally founded in 1995 as SAM Group, the firm is no stranger to Asia, where it counts Japan as its biggest market. RobecoSAM leverages the regional operations of Robeco and has a presence in Hong Kong, Japan, mainland China, Korea and Australia.
While its merger with Orix will help strengthen its ties in Japan – probably the region’s most well-established market for sustainability investing – RobecoSam sees China as having great potential over the longer term.
“We are very hopeful about China,” says Baldinger. “We’ve already had success investing in China, and on the investor side we are having discussions with family offices [there].”
He notes that “the second or third generation of family members who take control over allocation decisions are very keen, and also very sophisticated when it comes to sustainability investing”.
Aside from family offices, there is interest from sovereign wealth funds in China, says Baldinger. “The effect of pollution is very tangible and visible. For example, how many times have you seen a blue sky in Beijing? Also, given the large population, food security is at the forefront.”
Among RobecoSAM’s product range is a series of listed funds that are focused on areas such as sustainable agribusiness, smart energy and clean water. These are issues that are increasingly gaining recognition and significance in Asia, due in part to rising populations and urbanisation.
While sustainability investing is “a more common topic of discussion in Europe, there has undoubtedly been progress in Asia”, says Baldinger.
However, there are no plans as of yet to launch an Asia-focused sustainability fund. “We view Asia through the eyes of a global investor. Our products are global in scope and they invest in different themes,” he says.
“However, we have 26 different nationalities represented among our staff at RobecoSAM and increasingly the research department has people from China, Singapore and Korea. There’s a real shift going on, in terms of our global scope.”