Page: The Essex Environmental Opportunities Fund invests in public equities globally across all market capitalizations. The Fund is long-only, investing in low turnover fashion in environmental solutions. The solutions orientation leads to Fund holdings that are primarily focused on two economic sectors of the equity market: industrials and technology. The Fund is concentrated, and consistently owns between 30-35 stocks, historically in the small to mid-market capitalization segment of the equity market. As the focus is on clean technology solutions, the Fund is growth-oriented, with growth that should be greater than the board market over time.
Hortz: Based on your domain expertise, how best would you recommend advisors to work with their clients in this area and where does your fund fit in an asset allocation model?
Uek: Social impact investment solutions can now be had across all asset classes, and can also reflect the impact goals of asset owners. The Essex Environmental Opportunities Fund is appropriate for growth-oriented equity investors who want to invest for the long-term, with exposures to major secular trends such as climate change solutions and natural resource scarcity. The Fund is a solution we believe for investors who are concerned about the environment, and want to invest in environmental solutions. Perhaps investors are aware of their fossil fuel exposures, and they want to limit climate and carbon risk, yet invest in newer energy solutions. The Fund is solutions-oriented and thematic, but due to the growth orientation, will most likely be more volatile when compared to broad equity market indices.
Regarding asset allocation, the Fund is used by investors as a potential alpha source, and supplemented in most cases with a larger market capitalization, sustainability fund. Most advisors place the Fund in the thematic bucket, and knowledge of thematic investing has really increased amongst financial advisors over the past few years.
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