Frequently Asked Questions
Active Investors
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Why not simply seek out financial returns?
Because over the long-term, a company’s stock performance is tied to its ability to create economic, social and environmental wealth. A share price which is only based on financial criteria and which doesn’t take into account the financial, environmental, social and sustainable development risks can not be stable over the medium and long-term.
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What is shareholder engagement?
As shareholders we have a responsibility to inform company management about what is and is not working within the company. Management expects such discussions with their shareholders.
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Why bother being an active minority shareholder?
Because if an investor continuously behaves purely as a financial investor, company management understands that it is only the share price that matters and as a consequence will favour short-term strategies which would bring up share prices and satisfy the financial markets.
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Is your financial performance any better than that of other asset managers?
Our short-term financial performance matches that of any other asset manager which has been undertaking similar strategies for the past four years. We consider however, that our strategies will make a real difference over the medium-term.
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What difference does voting make if one is a small shareholder?
As most shareholders do not vote, company boards have grown accustomed to not taking into consideration their shareholders’ views and recommendations…and as a result sometimes incurring criticism in the financial and economic press. And yet company policy is decided through shareholder vote at AGMs. If all small shareholders voted at AGMs, some of these policies would not be voted in.
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How can you expect to be listened to if you are not well known?
We have earned the support of major French and international investors, which have themselves published governance codes and are committed to encouraging company boards to implement their recommendations. Their support has enabled us to change company by-laws at Vivendi and Alcatel and reach majority support from Total’s shareholders. Company management has also recognised that we are a positive driving force for change as we will not bring on lawsuits to achieve our goals but wish only to assume our role as active shareholder.
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How do you choose your engagement issues?
We rely on the major governance codes (OECD, International Corporate Governance Network, French Asset Management Association) and discuss with our main investors the initiatives we wish to undertake.
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Who are your investors?
Several institutional investors as well as French, European, American and even Australian asset managers.
Philanthropic Investors
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Why did you create a foundation?
As financial investors, we are able to bring our analytical skills, and support to non-profits and foundations.
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What is the purpose of funding social projects?
Because there are a great many high-quality projects led by social entrepreneurs in need of funding AND long-term support.
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How does this tie into your financial investments?
As the world is becoming increasingly globalised, many large companies (Danone, Essilor) have been developing social strategies with local non-profits/NGOs. We are convinced that these two ‘worlds’, traditionally thought to be separate and not related, can and need to be brought together to pursue these successful and innovative social strategies?
