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Oxford Endowment Fund increases minority equity stake in Osmosis Investment Management

Osmosis Investment Management, a sustainable investment specialist with USD1.5 billion in client assets, has closed a significant equity investment from the Oxford Endowment Fund. 

The fresh injection of capital into the sustainable investment firm is a further endorsement of Osmosis’s systematic investment approach which targets superior risk-adjusted returns from companies that display strong resource efficiency metrics. A non-targeted, natural outcome of the approach is a significant reduction in the environmental footprints of the funds and strategies relative to their respective benchmarks.

This strategic equity investment is growth capital, which Osmosis will deploy to deepen the firm’s portfolio management, research and distribution teams and enhance its operational infrastructure.

The Oxford Endowment Fund, managed by Oxford University Endowment Management (OUem), has held an equity interest in Osmosis since 2012 and this additional 2019 investment is designed to take their equity interest to a significant level albeit remaining as a minority shareholder under 20 per cent.

Osmosis has grown notably over the past two years, as an increasing number of institutional and wealth management clients select Osmosis funds and strategies as they seek to identify better risk adjusted returns, while simultaneously targeting a sustainable benefit.

The Osmosis Model of Resource Efficiency (MoRE) quantifies those companies across 33 economic sectors that produce more revenue whilst utilising less energy and water and creating less waste than their same sector peers.  By using a systematic approach,  based solely on objective data, Osmosis has developed a new proxy for  identifying quality management teams, as measured by those who have successfully monetised sustainability to the balance sheet.  Osmosis believes that over a market cycle these companies should display attractive investment characteristics, ultimately delivering stronger returns on equity.

Osmosis now manages a range of nine systematic, quantitative sustainable investment strategies. The latest Osmosis fund launch, in August 2018, was a global equity, sustainable market neutral strategy in a UCITS structure – the first hedge fund launched by the business. 

Ben Dear, chief executive officer of Osmosis Investment Management, says: “Oxford University Endowment Management have supported Osmosis since inception. They are patient long-term investors which aligns with both our investment approach and corporate values. This latest equity investment is tangible support for the role of an asset manager adding value though identifying new sources of investment returns with objectively measurable sustainable benefits. With climate risks rising up the agenda on a policy and corporate level it’s imperative that asset managers are able to offer their clients pragmatic investment solutions built on a more sustainable future.”

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