Investments take place through investment funds or investment institutions which are managed by Triodos Investment Management (Triodos IM), a 100% subsidiary of Triodos Bank.
Triodos IM is responsible for 16 funds, for both individual and professional investors. The funds invest in sustainable themes such as inclusive finance, food and agriculture, energy and climate, or in listed companies that materially contribute to the transition toward a sustainable society. The investment funds publish separate annual reports and most have their own annual general meetings.
EUR 5.4 billion
In 2020, Triodos Investment Management’s total assets under management increased to EUR 5.4 billion, a 10% increase (2019: 18% increase).
The COVID-19 pandemic has had a huge impact on the global economy and society, affecting lives and livelihoods almost everywhere. The range of mitigating measures, from full lockdown to no lockdown, resulted in disruptions to commodity markets, global trade, supply chains and tourism, ultimately leading to economic downturn.
At the start of the pandemic, Triodos IM took steps to ensure the well-being and safety of its co-workers and maintain operational resilience, swiftly followed by measures to preserve the financial health of the organisation. COVID-19 also affected its investments, both positively and negatively. On the positive side, the Triodos Investment funds were less sensitive to the downward appreciation of those sectors impacted most by the pandemic, such as the oil and aviation industry, as they are excluded from investments due to Triodos’ investment beliefs. As a result, especially at the beginning of the crisis, the funds showed a relative outperformance compared to the benchmark. On the other side, some investments were negatively impacted as the economic downturn increased counterparty risk and uncertainties about recovery dominated financial markets, which put pressure on equity and bond prices. To mitigate the increased risk and volatility, Triodos IM intensified the monitoring of all its investments throughout the year.
As a result of the mitigating measures and continued confidence among its investor base, Triodos IM was able to realise an overall growth in assets under management by 10% (2019: 18%) to EUR 5.4 billion. The net inflow of funds was 8%. The investment funds overall gained 3% of their value following stock exchange movements in 2020.
In challenging conditions, Triodos IM continued to focus on strategy execution, and specifically on implementing its strategic goal of becoming the asset manager of choice for investors seeking solutions for building impact investment portfolios.
In addition, Triodos IM expanded its activities in existing and new markets. It has increased its exposure and sales capacity in the Nordics. It also launched the Triodos Sterling Bond Impact Fund, bolstering the pact investment portfolio in the United Kingdom market.
The process to end the activities of Triodos Vastgoedfonds N.V. was completed in January 2020 through a final payment to shareholders. Following this final step in the liquidation process, the registration with the Trade Register of the Chamber of Commerce was terminated and the fund was removed from the register of collective investment schemes of the Autoriteit Financiële Markten.
At the end of 2020, Triodos IM renamed two of its funds. Triodos Renewables Europe Fund was renamed Triodos Energy Transition Europe Fund and Triodos Organic Growth Fund became Triodos Food Transition Europe Fund. These name changes more effectively and accurately convey their impact investment approach and align the funds more closely with the accelerating transition in energy and food.
2021 will likely continue to be centred around the challenges resulting from the COVID-19 pandemic. Although a vaccination programme may ultimately lead to a rebound in economic activities, we expect that the global challenges for our society and economy resulting from the pandemic will continue to dominate in 2021. COVID-19 has so far proved a major setback for the global sustainability agenda as articulated in the UN Sustainable Development Goals (SDGs) and private investors are needed more than ever to help to realise those goals.
Within this context, Triodos IM will continue to build on more than 25 years’ experience of bringing together values, vision, and financial returns in investment. It is helping to meet the European demand for values-based investment solutions that are critical for the transition to a more sustainable society. Through its funds, Triodos IM aims to extend its impact in the key areas related to its mission and the SDGs.
Triodos IM’s strategic focus in 2021 will continue to be on retail investors through distributors, high-net-worth Individuals, family offices and (semi-) institutional investors. Impact mandates that accommodate institutional investors seeking investment opportunities with positive impact will have a strong focus in 2021. In addition, Triodos IM’s international distribution strategy will be broadened by adding more European markets to its network, including France and Spain.
Triodos Investment Management will continue to pursue development and growth, both through expansion and development of existing funds and by creating new impact investment products.