Saker Nusseibeh CBE of Federated Hermes: Being Good Is Good Business
Episode 40, Sep 15, 2020, 11:00 AM
MR Saker Nusseibeh, CBE is CEO of the international business of Federated Hermes, appointed November 2011, having joined in June 2009 as CIO. He is also a member of the Federated Hermes Executive team.
Prior to this, Saker was Global Head of Equities at Fortis Investments, having previously been CIO Global Equities since 2005. Before this, he was CIO of Global Equities and Head of Marketing for SGAM UK. This followed SGAM’s acquisition of Trust Company of the West, where Saker was a Managing Director running global and international strategies, as well the London office. He started his career at Mercury Asset Management in 1987.
Saker is founder of the 300 Club and was an inaugural member of the CFA Institute’s Future of Finance Advisory Council from 2013 until 2019. He is a member of the IIRC Council, the FCA-PRA Climate Financial Risk Forum, the United Nations Environmental Programme Financial Initiative Steering Committee, the Banking Standards Board, the UK National Advisory Board on Impact Investing, and the advisory Board of the National Youth Orchestra.
In 2018, Saker was named CEO of the Year at the Financial News Asset Management Europe Awards. He has a BA and PhD in Medieval History from King's College, University of London.
Saker was awarded a CBE (Commander of the Order of the British Empire) in the Queen’s 2019 New Year's Honours list for services to Responsible Business and Finance.
Enjoy this epidose!
Highlights:
- Being good is good business.
- Beating benchmarks and creating a pot at the end of a period just heuristics. These are just shorthand.
- We don't live in an isolated bubble called the financial world. We live in the real world, in real communities with real neighbours in the real space.
- In reality, we control most of the capital markets in the world, so we have the ability to shape the world in a way that is beneficial to us.
- The reason you invest is you want to grow the economy that you want to live in. Every investment you make has an impact on your life, not just on your portfolio but on your life.
- Challenge -> Misunderstanding Adam Smith - the moral philosopher: “happiness, perhaps the preservation of his existence again, all right, his contentment, happiness here means contentment, the preservation of his existence, his very life depends upon what its preservation preserving what the prosperity of society“.
- COVID has generated the debate. What is it that we as a developed society care about? We should care about the life of all citizens including citizens who are not economically productive - that’s what pensioners are in harsh economic terms. Do we care about citizens’ lives or do we care about pure financial economic growth?
- We have a shared assumption, the shared assumption that we have is that it's possible in the financial sector to combine being really technically excellent at what you do, while at the same time being truly a decent human being. We call it being nice.
- We are privileged because of how much we get paid and where we are, therefore we should reach out to help those around us.
- It’s about how much giving of your time and how much do you empathise.
- We see ourselves as the pebble that maybe can help start the avalanche that can change the market for better. I think we are part of that movement. The key is to make change for the better.
- It’s not what we do, its who we are. Who we are then produces what we do. But you start with the human first, not the product.
- High active share managers, even the ones that are not skilled outperform benchmark and everybody else after fees from that position.
- People use the word alpha. I don't like the word alpha, its value.
- We pay half of our bonuses on “being nice”.
- We invented the idea of engagement. Doing stewardship is a better way of enhancing value over the long-term.
- I'm absolutely convinced that the trend is that it will become almost impossible for people to invest in index without investing in stewardship.
- I worry that if ESG becomes a trend, it becomes a label. If it becomes a label, it becomes a tick box exercise.
- When we talk about ESG factors, however, it seems like the market wants to have a specific box that they want to put everything into it rather than the nuance. It’s the nuances of what sustainability means, what governance means, that adds value in reality.
- What moves companies is not just financials. There are lots of intangible assets in some of the biggest companies, in brands and reputation. Culture in banks is more important than measuring the financials.
- On climate change and carbon investments, to solve the problem you need 3 things to happen:
- Convince the company to close down or change business model
- Find alternative sources of what the company does
- Convince consumers to shift consumer behaviour
- Encourage oil major to shift to cleaner energy
- Advocate regulators to move to clean EV
- Change consumer behaviour e.g. move away from fast fashion and meat.
- Invest in alternative visions and technology.
- It's not a one-pill solution. You have got to do all these things.
- We are not interested in virtual signalling.
- COVID has taught us that extreme events can whack society in major ways.
- When I judge myself, I genuinely do not think that success is money or position or title. I think success is helping others.
- We receive what we have in trust from God and we have to pass it on to the next generation
- Every day “I judge myself”: What have I really done to make an impact?
- I think success is helping others
- If I know I’ve not done what I should do. I ask myself, have I done the best I could, in giving something back?
Time Stamp:
[04:40] Joining asset management in the early days
[05:38] What is sustainable and impact investing
[11:00] We control most of the capital markets in the world
[12:45] Early works of Adam Smith as a moral philosopher
[16:35] Gambling vs investing
[17:35] Holistic returns vs purely financial returns
[20:35] COVID debate: what and who do we care about?
[23:30] Who is Federated Hermes - Leaders in Sustainability and Engagement.
[29:40] The Merger of Cultures
[32:06] What does being nice look like?
[36:10] Reaction to George Floyd’s death
[38:25] Federated Hermes AUM, EOS - Engagment and third party assets
[44:50] We invented this idea of engagement
[47:00] Our own academically sponsored work: ESG factors performs better
[50:38] Silo mentality that says the financial system and economic system is here
[54:00] Standard reporting and the obstacles to moving to a consensus
[57:00] Receiving the highest rating for Real Impact Tracker certification
[1:02:40] Carbon investments, divestment, replacements and climate action
[1:07:57] Impact of climate change if unmitigated
[1:11:33] God’s gift and the story of an old man planting an olive tree
Useful links:
Saker Nusseibeh CBE on Linkedin
Federated Hermes - https://www.hermes-investment.com/uki/
Dr. Hans Christoph https://www.linkedin.com/in/andy-haldane-11877887Hirt Head of EOS on LinkedIn
Saker Nusseibeh on why Federated deal was right for Hermes - Financial Times
Federated Hermes - https://www.hermes-investment.com/uki/
Dr. Hans Christoph https://www.linkedin.com/in/andy-haldane-11877887Hirt Head of EOS on LinkedIn
Saker Nusseibeh on why Federated deal was right for Hermes - Financial Times
Adam Smith as moral philosopher
Adam Smith - Book: The Theory of Moral Sentiments
Andrew Parry episode of The Impact Impact Leaders
Cary Krosinski episode of The Impact Impact Leaders
Mark Campanale episode of The Impact Impact Leaders
Martijn Cremers of Norte Dame on LinkedIn
Active Management by Martijn Cremers - Three pillars for Active Share success
Active Management by Martijn Cremers - Three pillars for Active Share success
Professor John Kay https://www.johnkay.com/
John Kay’s new Book: Radical Uncertainty With Marvyn King
Andy Haldane https://en.wikipedia.org/wiki/Andy_Haldane
Andy Haldane https://en.wikipedia.org/wiki/Andy_Haldane
Andy Haldane on LinkedIn https://uk.linkedin.com/in/andy-haldane-11877887
Reuters: Pope backs carbon pricing to stem global warming and appeals to deniers
Real Impact Tracker highest score press release
Real Impact Tracker Federated Hermes Summary Report
Church of the Holy Sepulchre in Jerusalem - Insider Article
Reuters: Pope backs carbon pricing to stem global warming and appeals to deniers
Real Impact Tracker highest score press release
Real Impact Tracker Federated Hermes Summary Report
Church of the Holy Sepulchre in Jerusalem - Insider Article
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Contact us to help you transition into Sustainable & Impact Investing - ILA & Partners
Connect with JP Dallmann on Linkedin, Twitter, or Instagram.
Contact us to help you transition into Sustainable & Impact Investing - ILA & Partners
How to incorporate SDGs into your business model - Fast Forward 2030
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