Our 60 second interview introduces Will Baylis and Naomi Bant from Martin Currie Australia (MCA). Will and Naomi manage the MCA Sustainable Equity strategy. Launched in 2020, the strategy uses a proprietary approach for understanding sustainability and financial attributes. As active investors, this process is deliberately designed to focus on a company’s overarching net benefit, based on an assessment of the material benefits and risks that may exist, rather than applying a wide array of negative screens.
Tell us about your background and investment experience.
Will
I grew up on a farm in Victoria, Southeastern Australia, and that upbringing has deeply influenced me. I started in the industry in 1985 as a trainee investment analyst at National Mutual Life Association. Over the years, I’ve held various roles in stockbroking, including stints in London, New York, and Asia.
I joined MCA over 12 years ago to reconnect with my roots in asset management. Initially, I was in a client-focused role, which gradually evolved into portfolio management.
Several years ago, our firm adopted the motto “Investing to Improve Lives.” Within our team, we started to discuss how we could have a greater purpose than just managing money, and this resonated with me and helped to drive the establishment of the Sustainable Equity strategy. And now, I’m the Co-Portfolio Manager for the strategy.
Naomi
I joined MCA’s predecessor firm 18 years ago as a graduate with a background in quantitative research. I was drawn to MCA because of the flat structure, which allowed junior members, like me at the time, to contribute meaningfully and learn directly from seasoned professionals like Reece Birtles (MCA’s Chief Investment Officer (CIO)) and Michael Slack (Head of Australian Equity Research).
Sustainability has always been a passion of mine, rooted in my love for the outdoors and hiking. My role evolved from focusing on risk control to developing sustainability frameworks that balance financial returns with societal benefits. The chance to further grow my skill set, become Co-Portfolio Manager in 2020, and invest in companies that were on a sustainable pathway, was an exciting evolution in my career.
What was your involvement in the development of the Sustainable Equity strategy?
Naomi
My initial role involved researching and back testing how best to integrate our longstanding Valuation, Direction, Quality research with our proprietary Sustainability insights with Sam Li (Portfolio Manager). We wanted to build a portfolio that balanced sustainability and financial outcomes, while also running a high-conviction strategy. Working closely with Will, Reece, and Sam, we combined our diverse backgrounds to bring this portfolio to life.
I enjoy working with my colleagues to continually improve our investment process. I’m also focused on expanding and refining our sustainability frameworks, covering topics like shadow carbon costs, modern slavery, and natural capital.
How have you seen sustainability change over your years in the market?
Will
When I started 40 years ago, sustainability wasn’t even a concept. Back then, shareholder return was the sole focus. But steadily, and even more so since the Banking Royal Commission1, there’s been a shift towards considering both financial returns and non-financial impacts on various stakeholders.
I’m pleased to see a growing focus on issues like employee safety, First Nations, environmental impacts, and climate change. I believe companies, not just governments, need to do the heavy lifting on sustainability in a way that benefits all stakeholders.
Ongoing communication between stakeholders is going to be key to reduce friction. For example, communities need to be involved in the development of wind farms, transmission needs to keep up with solar generation, and governments need to consider the impact on society’s standards of living in shutting down fossil fuels too quickly.
As investors, it’s our duty to raise these issues during our engagements with companies.
What do you enjoy most about your role?
Will
I enjoy engaging with boards, management, heads of sustainability and employees across companies. Unlike quantitative-only and passive funds, our analysts are responsible for taking an active role in ownership. As portfolio managers, our additional involvement in engagement is a great opportunity which provides valuable insights to the impact of investment and sustainability themes across many companies.
Working with colleagues who have different skill sets, like Naomi, has been a huge opportunity for me, and I really enjoy working with her. Her quantitative background complements my passion for stocks, helping us maintain overall risk control.
Naomi
Given my quant background, I tend to respond more to incremental changes in proven quantitative signals and I’m more comfortable reflecting this in our position sizing than my fundamental colleagues.
Although we have a disciplined process, I think it’s important that our portfolio decisions are made fundamentally by Will and myself drawing on our complementary insights and experience.
Where are some key sustainability opportunities for Australian companies compared to global counterparts?
Will
People often don’t consider what goes into making the next sustainable product. Australia plays a crucial role in supplying materials like lithium, copper, and aluminium, which are vital for the energy transition. People often overlook the source of these materials, but Australia is a significant supplier.
Naomi
Australia also has great companies offering low carbon solutions, such as Worley, a company that traditionally serviced oil and gas companies and who now provide sustainable solutions to customers like CCUS, hydrogen, and low carbon fuels. It’s a prime example of the undervalued, sustainability-driven stocks we seek for this portfolio. Additionally, Australia’s healthcare system is world-class, with companies like Medibank and CSL leading the way in innovation and improving patient outcomes.
How do your personal interests overlap with your work as portfolio managers?
Will
In my spare time, I’m a light airplane pilot, and seeing Australia from above gives you a unique perspective on the country’s natural beauty and the growing risks to it, like biodiversity loss. This experience motivates me to invest in a more sustainable future.
Naomi
I love adventure travel, particularly hiking. It gives me time to reflect, and I’ve witnessed the effects of climate change firsthand in places like the glaciers of the French Alps which are melting at an incredibly rapid rate.
These experiences have deepened my commitment to sustainable investing, with the hope that future generations can also enjoy these natural wonders.
Discover more about Martin Currie Australia
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This article was originally published as part of Stewardship Matters - Edition 13: Social Impacts . Click here to find out more about our Stewardship Matters series.
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Pathway to 2030 Forum: Net Zero in the Real World - A 90 minute recording of the Forum is available to view here.
Sources
1 The Australian Banking Royal Commission was established on 14 December 2017 to inquire into and report on misconduct in the banking, superannuation, and financial services industry.
Important information
This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’), authorised and regulated by the Financial Conduct Authority. It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.
The information contained in this document has been compiled with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this document for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.
The document does not form the basis of, nor should it be relied upon in connection with, any subsequent contract or agreement. It does not constitute, and may not be used for the purpose of, an offer or invitation to subscribe for or otherwise acquire shares in any of the products mentioned.
Past performance is not a guide to future returns.
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The views expressed are opinions of the portfolio managers as of the date of this document and are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice.
The information presented does not constitute specific investment advice and does not include recommendations on any particular security or securities. These opinions are subject to change without notice and do not constitute investment advice or recommendation
The analysis of Environmental, Social and Governance (ESG) factors forms an important part of the investment process and helps inform investment decisions. The strategy/ies do not necessarily target particular sustainability outcomes.