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SRI team bites the dust as takeover leaves void

January 2010

One of the best-known British socially responsible investment teams has been disbanded due to a corporate shake-up that has left it with no future role.

The three-strong unit at London-based Insight Investment has been wound up after its parent company Lloyds Banking Group sold the Insight name and much of its external fund management business to Bank of New York Mellon (BNYM). It also  moved other parts into Scottish Widows Investment Partnership (SWIP), its Edinburgh-based asset management company, but the SRI team could not find a place either within BNYM or SWIP.

The team head, Rory Sullivan, who is a high-profile figure in the SRI world, was made redundant just before Christmas along with his colleagues Rachel Crossley and Jennifer Kozak. The three had been offered moves to Edinburgh to join SWIP but eventually declined, and all are now looking for alternative employment.  

BNY Mellon bought Insight from Lloyds for £235million ($376m, j263m) in August 2009, creating uncertainty about the SRI team’s future. BNY Mellon has said there will be around 120 redundancies across the whole of Insight by March of this year.

Insight told EP: ‘The sale of Insight by Lloyds Banking Group encompassed our external assets of around £83billion under management including our financial solutions, fixed income, multi-asset, specialist equity and absolute return capabilities. This has created a change in the asset mix, significantly reducing our equity holdings. 

‘As a result, going forward Insight will no longer have a dedicated responsible investment team. Instead, we will devolve the responsibility for the analysis of environmental, social and governance issues to our investment teams, where our analysts and fund managers will be responsible for identifying material issues and ensuring that these issues are built into our investment decisions.’

Insight said it would, however, be continuing its ‘active support’ and membership of initiatives such as the United Nations Principles for Responsible Investment, the Carbon Disclosure Project, the Institutional Investors Group on Climate Change and the UK Social Investment Forum.
 
Matt Christensen, executive director of the European Social Investment Forum (Eurosif) said the move was unfortunate but was being seen in the SRI sector as due to the particular circumstances of the takeover rather than the current state of responsible investment. ‘They were a good team and it’s a shame, but it’s not necessarily part of a trend. In acquisitions you never know how things are going to tumble. It’s just part of the market.’

Insight’s award-winning SRI unit, originally set up by HBOS, has been one of the most prominent in the field and was at the forefront of moves around a decade ago to move ethical investment away from the prevailing negative screening approach to the idea of engagement with companies.




Insight Investment | Global | SRI

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