In 2020, LIOR GLOBAL PARTNERS, an asset management company, is setting up in Monaco. We met its two founders, Jérémy TOUBOUL and Raphaël REMOND.
Amongst many management companies, what is the differentiating factor of LIOR?
M.TOUBOUL: The company was born at the end of 2020. After nine years as Partner-Fund Manager for H2O AM, I left in September 2019 with the idea of setting up my own Global Macro management company. Its characteristic: to integrate sustainability criteria into its investment process.
However, many investment companies are moving towards SRI (Socially Responsible Investment) and ESG (Environmental, Social and Governance criteria)?
Our originality is to do this at the global macro level. We built LIOR with Raphaël because, apart from the fact that we have known each other for over twenty years, we are very complementary. I take care of investment management, while Raphaël's experience concerns the corporate part, company management and risk management.
How do you integrate sustainability criteria into the investment process?
M.REMOND: Integration takes place at several levels.
Firstly, an exclusion level: we will exclude certain securities from our investment universe, depending on the companies' sectors of activity. Delivering performance remains the key to our business. The ESG part is an additional element of risk vision that allows us, beyond the financial criteria, to integrate clear, defined and objective non-financial criteria into our investment model,
I would add that sustainability, for us, is important at the level of the fund and the selection of companies, but also at the level of LIOR. Within our company, we are very attentive to ESG criteria, with a strong philanthropic side.
In which sectors do you invest?
Essentially in four universes: Forex, (currencies), sovereign bonds, equities and credit. We apply our ESG approach to three of them, with the exception of Forex: currencies are not considered financial instruments, so we exclude them from our ESG approach.
Can you explain your approach?
Today we have launched a Luxembourg domiciled fund.
The new European regulation, the SFDR (Sustainable Finance Disclosure) helps to better understand the ESG part of funds, which are divided into two families, those that are ESG and those that are not.
When a fund is ESG, which is the case for ours, you can decide to take an active part in the way to strengthen ESG in the companies of the fund, or analyse and recognise their efforts on the environmental and social governance approach... Strategically, we have chosen the latter option: we remain focused on the performance and risk aspect where ESG is a key risk measure, without interventionism on the ESG policy of companies.
We analyse the total income generated by the exclusionary elements in a company before launching the investment.
What about sovereign bonds?
We use an external data provider with a very broad reference universe, such as rating almost 180 countries around the world.
Strategically, we have two main objectives. In absolute terms, we have defined the fact that we want to be properly rated in terms of ESG ratings. In relative terms, we use a benchmark linked to our Macro investment universe. We want our portfolio to always score better than the benchmark.
Our approach is therefore systematic and objective. This model must be evolutionary, we consider that we are at the beginning of a journey with ESG for the next ten years at least: it is a key subject for investors.
What kind of clients do you have?
M. TOUBOUL: Retail clients and institutional clients, who come to us to find high-performance solutions in terms of absolute return, with a global macro ESG approach.
You mentioned philanthropy?
M. TOUBOUL: Yes, LIOR GLOBAL PARTNERS has values of sustainability, performance and philanthropy. They are part of our DNA. I was involved in a charity in England for many years, helping to set up a school. We want to have an impact on the world around us by offering scholarships, or help for hospitals, always related to children.
M. REMOND: I am a member of the Samu Social International corps, founded by Dr Emmanuelli. My international career at State Street, where I managed various banks in the group for more than twenty years, made me aware of the need to help people who are much less fortunate than I am. We never do enough for them, but I hope we can help through LIOR. We are committed to systematically donating 10% of our annual profits to child-related charities.
Why did you settle in Monaco?
M. TOUBOUL :
For family reasons, but also because the Principality is really oriented towards ecology and philanthropy. For the political stability of Monaco. And then, the financial transparency makes the place really attractive.