New offering uses ESG integration to reduce risks and identify prospects within technology sector
After announcing its first foray into Canada’s liquid-alternative investment space late last year, Waratah Capital Advisors has announced its second alternative mutual fund, which takes long and short equity positions based on an ESG integration strategy.
Operating pari-passu with the original OM fund, the Waratah Alternative ESG (AESG) Fund integrates ESG factors and considerations into fundamental investment analysis to minimize inadvertent and direct ESG-related risks, as well as find new ESG-related investment opportunities in areas such as water technology, battery materials, renewable energy, and plastics innovation.
Jason Landau, portfolio manager to the Waratah AESG fund, said the firm spent more than two years on research and development before it launched the strategy. It takes the firm’s bottom-up analysis of specific companies and factor management approach, and integrates it with ESG analysis alongside a proprietary ESG scoring methodology used by Waratah.
“Unique to our strategy is that we can go both long and short, rewarding companies with good ESG practices and scores while shorting those with negative attributes,” Landau said.
Waratah co-founder and CEO Blair Levinsky described the fund’s year-to-date performance as “extremely resilient,” protecting capital as well as posting positive returns within the firm’s expectations.
“A long short approach to ESG investing allows us to continue with the portfolio construction and approach to risk control which we have become known for, while at the same time allows us to avoid excessive concentration often associated with ESG funds due to traditional divestment of offending sectors,” Levinsky said.