By Simon Jessop
LONDON (Reuters) - European investment manager Candriam said its total assets rose 7.1% to 150 billion euros ($177 billion) in the first six months of the year, boosted by net inflows into its environmental, social and governance-focused funds.
Demand to invest in ESG-related funds has surged over recent years as the world looks to move to a low-carbon economy in the fight against climate change, and as social issues such as diversity take on greater importance for investors.
Candriam, part of privately held insurance firm New York Life, said the gains meant it had hit its five-year asset growth target six months ahead of schedule, rising more than 50% since the goal was set in 2016.
"The main reason (for the growth) is the ESG trend," Candriam Chief Executive Naim Abou-Jaoude told Reuters. "In 2021, 90% of the net sales came from ESG products," compared with 50%-60% over the previous three years.
"The trend is accelerating," he added, with some clients shifting out of vanilla actively managed funds to sustainable funds, and demand from private clients increasing.
Net inflows accounted for 4.2 billion euros of the 10 billion-euro half-year asset gain, with the balance from positive investment performance. Total assets at the end of December 2020 were 140 billion euros.
Of the inflows, 1.9 billion euros went into sustainable-focused global credit and high-yield funds, 1.1 billion went into equity funds, of which 600 million euros was sustainable equity, 800 million euros went into thematic funds and 400 million into absolute return.
Among the most in demand thematic funds during the period were the 1.9 billion-euro Oncology Impact Fund, with inflows of 180 million euros, and the 1.07 billion Climate Action Fund, with inflows of 250 million euros.
The Candriam Sustainable Medium Fund, which invests in both equities and bonds, took in 629 million euros.
Candriam assets dedicated to ESG investing now totalled 98 billion euros, with the majority of its European fund range classified as sustainable under the European Union's Sustainable Finance Disclosure Regulation (SFDR), it said.
($1 = 0.8455 euros)