Case study: How MAPFRE GROUP is developing its investment capabilities
José Luis Jiménez, Group Chief Investment Officer at MAPFRE shares his top priorities for expanding investments and his strategies for overcoming operational challenges.
Sara Benwell POSTED ON 2/25/2021 9:05:03 AM
Sara Benwell: What are your focuses for developing investment capabilities?
José Luis Jiménez: The principle focus for our asset management businesses is to continue to develop our skills, processes and procedures, and a product range, which projects the Corporate Social Responsibility (CSR) aims of MAPFRE GROUP.
CSR has been at the heart of our Group’s policies since as long ago as 1964 when our Foundation statement was accepted at the AGM.
“We have rolled out the EEFAS accreditation certification to all our asset management staff, including myself”
Now that we are actively expanding our asset management businesses, the onus going forward is not just to reflect those values but to project them to customers around the world through a distinctive approach to ESG and sustainable investing.
Our focus is therefore moving beyond the development of investment capabilities towards a focus on supplementing our product range and improving distribution.
We also need to look to Europe to create European standards of excellence. For our part we will embed professional standards at MAPFRE insofar as we can, and so we have rolled out the EEFAS accreditation certification to all our asset management staff, including myself. I feel this is an important step in terms of setting high standards in terms of ESG research.
Sara: How are you promoting SRI and why is this important for the organisation?
José: Following a review of our asset management operations five years ago, MAPFRE AM we began to focus our efforts on creating products which project the Group’s core values.
So, we set about establishing a range of thematic funds which had ESG at their very heart. We started with the Good Governance fund which reflect our investment in companies that demonstrate good governance in the way they conduct their business.
Good governance was already well established within our investment processes, so it was an obvious first step on our ESG product development journey.
“These products are really important to MAPFRE as they demonstrate the asset management businesses’ commitment to the objects of the wider Group”
Capital Responsable, is a fund which invests in the stocks and bonds of European companies. Each investment must satisfy our researchers that it meets our high CSR standards.
Inclusion Responsable – our fund which invests in European companies which actively seek to include disabled people within their workforces – was an internal idea from our chief economist Alberto Matellan, whose own family has been impacted by disability.
These products are really important to MAPFRE as they demonstrate the asset management businesses’ commitment to the objects of the wider Group.
In doing so we are seeking to demonstrate commitment and not just pay lip service to it – an accusation that has been often been levelled by critics of the asset management industry’s response to ESG.
Sara: What are some of the biggest operational challenges to launching ESG funds -and how did you overcome these?
José: Four years ago, the initial challenge was to formalise our ESG processes and procedures. We were humble enough to appreciate that best asset management practice in ESG was not to be found in Spain, but elsewhere.
It quickly became clear to me that Paris was more advanced that most other European asset management centres, and so that’s where we started to look for help which is why we turned to the French ESG focused boutique La Financière Responsable (LFR).
“We very quickly overcame any operational challenges that confronted us”
We wanted to tap into LFR’s research, its data base and proprietary vetting system while at the same time we wanted to work with people who we really respected, and who respected us.
By doing this, we very quickly overcame any operational challenges that confronted us. By taking a stake in LFR and working closely with their committed staff, we adopted a well-established ESG process, long before many other asset managers had even started to consider implementing one.
Sara: What role did acquiring a boutique play in this journey – and how did you go about making sure the acquisition was successful?
José: LFR had been focusing on sustainable investment for a number of years and had gained respect from the French asset management industry for developing its own proprietary system for researching companies while applying an ESG filter.
LFR’s approach was to interrogate companies and get them to answer a series of questions about the environmental social and governance aspects of their businesses and to rigorously score them with very clear standards.
The development of that relationship quickly translated into new products which focused on sustainability and so projected the values of the Group.
Sara: What are the priorities for the short-medium and-longer term, and how are you gearing up to make sure you are ready to meet them?
José: Our priorities are to grow our product range while expanding the reach of our distribution. We now have a core of products which match our objectives . These products invest in bonds, equities, property, alternatives and private equity.
“Our priorities are to grow our product range while expanding the reach of our distribution”
Looking ahead therefore, the plan is to continue to refine our offering, but to also concentrate on distribution. There are many opportunities across Europe and Latin America where Mapfre is strong. But we also have sight on the UK where I’m sure institutional investors will warm to our approach to CSR and the track record of our funds.
On the industry front I believe the asset management industry has a long way to go particularly given that firms really need to have ESG at their heart, so they really mean what they do - it’s not just about subscribing to a database, it’s about winning hearts and minds.
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