Unpacking Momentum Investment’s responsible investment philosophy
6 Sep, 2022

Unpacking Momentum Investment’s responsible investment philosophy

Kudzayi Ziso, Portfolio Manager at Momentum Investment

A couple of years ago, Momentum Investments embarked on a transformation journey with the aim of investing in more transformed managers to deploy capital into the various strategies used in its solutions.

According to Kudzayi Ziso, Portfolio Manager at Momentum Investment, transformation in the South African asset management industry ties in strongly to the social aspect of ESG in which inclusivity and diversity are key considerations.

Not only do diverse and inclusive practices go a long way in resolving social economic justice issues, Ziso says the domino effect is also even more far reaching. “This leads to improved business outcomes for underlying asset managers, and also makes for stronger teams that easily attract and retain top talent,” she says.

When making investment decisions, she says Momentum Investments follows a few guiding principles in executing the transformation plan. “The most important and overarching action is to deliver on the portfolio’s risk and return objectives. First and foremost, we solve for what is best suitable for the solution we trying to solve for. The investment case always prevails.”

Ziso says they then shortlist prospective asset managers in a way that supports transformation. Key to this is looking out for authentic and broad-based transformation. “A powerful tool we have at our disposal is the active engagement we have with both prospective and incumbent underlying asset managers.”

Wide strides have already been made organically within the industry over the last few years, however Ziso says active engagement and deliberate plans are what propel the industry to achieve a more equitable racial and gender balance.

“Key to our plan is how we measure our progress,” says Ziso. “We seek to provide accountability to all stakeholders in a way that is specific, measurable and verifiable. To this end, we utilise well known industry surveys and metrics as tools.”

She says at Momentum Investments, we regularly monitor granular aspects of our transformation plan such as total empowerment shareholding, the number and gender of black investment professionals, as well as procurement.

In terms of Impact Investing, Momentum Investment is committed to six of the 17 UN SDG, focusing on:

Ensuring healthy lives, promoting the well-being for all ages.
Ensuring inclusive and equitable quality education, to promote lifelong learning opportunities for all.
To ensure access to affordable, reliable, sustainable and modern energy for all
To promote sustained and inclusive economic growth, for productive employment and decent work for all
To build resilient infrastructure that promote inclusive and sustainable industrialisation and foster innovation
To take urgent action to combat climate change and its impacts

While we believe all the SDGs underpin all we do, if we align our investment with the goals and focus, the impact we can deliver on can be more significant. “It is imperative that we direct our investments to where deep social impact and multiplier effects can be felt in the communities where they are most needed,” urges Ziso.

For her, ESG needs to be a fully integrated approach where active ownership is a key lever and ESG factors are applied at every decision point of the investment process. “It’s high time to be transparent and we believe in evidence-based examples where you can fully demonstrate the impact your investments have on real people in the real world.”

ENDS

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