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Nottinghamshire council takes the ethical route with Henderson

August 1999

Henderson Investors has won the investment mandate for a £150 million ethical fund for the UK’s Nottinghamshire County Council.

The fund will initially work with £50 million, but with provision to add another £100 million if the council decides returns are satisfactory.

Winning the mandate is a coup for Henderson’s newly-strengthened social responsibility investment team, which has now formally merged with NPI’s ethical investment unit. The two arms have been joined as a result of NPI’s take-over by Henderson’s parent company, AMP.

The new ethical team is thought to be the largest such unit in the UK. It has four fund managers, five researchers and a four-strong unit marketing to IFAs and institutions. Long term direction and strategy is provided by Tessa Tennant, one of the UK pioneers of ethical investment.

Henderson, which also began managing £50 million on socially responsible lines for Lancashire County Council in early July, believes there will be increasing interest in ethical investment from councils now that local government minister Hilary Armstrong has promised to extend the government’s new ethical disclosure regulation to council funds.

‘The regulation has blown away any arguments about fiduciary responsibility,’ said Kate Murphy, Hendersons’ divisional director for ethical UK equities.

Although only a handful of ethical portfolios have been set up by local authorities so far, the action by Lancashire and Nottinghamshire appears to indicate signs of new interest.

Norfolk County Council is currently considering bids to set up a £200 million UK equity portfolio using a ‘socially responsible investment approach’.

NPI’s Social Index has outperformed the FTSE All Share Index in its first year of existence.

Value of shares in the social index rose by 8.11 per cent in the year from its launch on 1 July 1998, compared with a 7.39 per cent growth in the FTSE All Share Index over the same period.

The NPI index tracks the performance of 150 UK companies that have been assessed by NPI as being the most effective in managing their environmental and social impact.




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