TREND BAROMETER 2019
At the start of the year, we asked responsAbility’s CEO about his expectations for 2019. In this interview, Rochus Mommartz speaks about favourable returns, the trend towards sustainability and approaches to resolve the SDG financing gap.
The difficult investment environment has featured prominently in recent media reports. Swiss daily Neue Zürcher Zeitung even called 2018 “a hair-raisingly bad investment year”1. Does your experience at responsAbility endorse these reports?
No. Our private debt products generated an attractive USD performance in 2018 and continue to benefit from rising USD interest rates. With returns of more than 6%, some of our funds with limited private equity allocations rank among the year’s absolute top performers. And we’re confident that our investment strategies will continue to do well in 2019.
“With USD returns of more than 6%, some of our debt funds with limited private equity allocations rank among the absolute top performers of the year.”
Sustainability and impact have become buzz words in the investment industry. What does that mean for responsAbility?
It makes our work easier. We’ve been active in this area for the past 15 years. As a niche provider, we’ve completed SDG investments totalling about USD 9 billion in developing economies during this time. For a long time, many investors had difficulty understanding our investment philosophy based on the combination of financial returns and sustained social impact. The fact that major players in the sector have now also discovered this field for themselves shows that a much broader investor base is embracing the topic of high-yielding development investments. That’s an opportunity for us.
Does that mean that you now have to compete with the sector’s heavyweights?
No. The SDGs require enormous capital commitments and it’s important to leverage different sources of capital. Our investments – in private, non-listed companies – requires a lot of know-how that we continue to expand. For example, we plan to launch a new private debt fund focused on access to clean energy, particularly in Africa. It will enable investors to benefit from the sector’s strong growth while ensuring that private households and businesses have access to reliable electricity supplies from solar energy.
Top performance rankings for responsAbility funds
The “Investment Funds” supplement to leading Swiss financial newspaper Neue Zürcher Zeitung1 includes a comprehensive performance review for Swiss retail funds in the year 2018. Two responsAbility funds, which focus on micro- and SME finance and sustainable agriculture, respectively, scored particularly well:
- Ranking Absolute Return Funds CHF: 2nd place
- Ranking Absolute Return USD Low: 3rd place
- Ranking Commodities – Agriculture: 1st place
You currently offer 15 different funds covering three investment themes and two asset classes. How important is it to continuously bring new products to the market?
Innovation is essential for a company like responsAbility. Effectively, it’s part of our DNA. In 2018, we launched a Luxemburg-domiciled private debt fund with a focus on sustainable agriculture that primarily targets institutional investors in the EU. Agriculture plays a key role for continued global development. By making it broadly investible, we actively support the UN SDGs.
What else have you got planned for 2019?
Besides the new energy fund, we’re working on two additional initiatives: a social bond and a capital market transaction for small and medium-sized companies. With both projects we’re working on new ways of enabling a broader investor base to tap SDG-focused investment opportunities. This is what excites us!
1 NZZ, 22/01/2019, Anlagefonds, p. 15