“So you’re really throwing in the towel then?” I asked the chairman of the insignificantly-sized investment company Kermitted Asset Management when we caught up the other week. “Well, I wouldn’t put it quite like that,” he demurred. “But, yes, it would appear this latest iteration in an improbably long line of insignificantly-sized investment companies has reached its natural end. What gave me away?”
“Partly it’s been the eloquently elegiac tone of our recent conversations,” I replied. “Though, if I absolutely had to pick a clincher, it was my tripping over Adair and his luggage as I walked into your office just now.” “Yes,” nodded the chairman looking fondly at his bodyguard-slash-emotional-support-hamster sitting patiently atop a large suitcase. “For a rodent – even one the size of a small terrier – that boy does not pack light.
“But you didn’t think he was simply off on holiday?” “Given the UK’s stringent quarantine laws and the fact those teeth could take someone’s hand off at the wrist, not for a moment,” I replied. “Although, now we’re on the subject, I have always wondered how Adair managed to accompany you on those last two COP extravaganzas to Dubai and Sharm el-Sheikh.”
You could – if you really had nothing better to do – read more from Kermitted Asset Management here
“Let’s just say I have a very resourceful travel agent,” said the chairman vaguely. “Fair enough,” I said, as I was keener to ask about the final catalyst for his decision to shut up shop – and so I did. “I’m not sure there was one as such,” the chairman replied with a shrug. “I mean, you must have felt it too over the last year or so – the slow but inevitable sense of an ending, as it were?”
“I do know what you’re saying,” I agreed. “It’s like His Majesty’s financial services industry has been grappling for an excuse to bring down the curtain on all things ESG and, as is its way, move onto a shinier, newer version of Exactly The Same Thing.” “It’s a classic for a reason,” the chairman nodded. “Still, if I am honest, maybe it was something you said about waves a little while back that first got me thinking.”
“Really?” I nodded, trying not to look too flattered. “My patented Three-Wave Theory of Sustainable Investing first aired in February 2023? The first ‘Ethical’ wave of the 1990s breaking on the shores of the dotcom boom; the second ‘SRI’ wave of the 2000s crashing on the shores of the global financial crisis; and, contrary to how it may feel, the third ‘ESG’ wave of the last decade not actually stopping but merely growing shallower?”
“The very same,” the chairman nodded. “And kudos on finally managing to condense it down to a single paragraph.” “And what did it lead you to think?” I asked, electing to focus on the chairman’s affirmation over his sarcasm. “That it’s wrong,” he replied. “Oh,” I said – and this time my feelings were obvious, even to the chairman. “Perhaps ‘wrong’ is a bit harsh,” he added quickly.
“What I mean to say is, while promising, your grand theory needs a little finessing.” “Oh, please – do enlighten me,” I grumped. “It’s a question of perspective, that’s all,” the chairman continued. “You see, you have been viewing your sustainable investing waves as if standing on the shore and have naturally concluded they need to be surfed as long as possible before they crash.”
“And you have a better idea?” I grumped again. “In a word, yes,” the chairman replied. “What if the right way to view this is not from the side but from above?” “Then each sustainable investment wave would simply be the tide coming further in,” I nodded thoughtfully. “The implication being sustainability gains more ground and greater acceptance each time. Oh – that’s annoyingly good. Surprisingly upbeat too.
“Still, it does beg the question why it would prompt you to close Kermitted?” “Isn’t it obvious?” sighed the chairman. “Because that makes sustainability an ‘evolution’ theme and insignificantly-sized investment companies make fortunes on revolution-type ones. Take this artificial intelligence excitement – it sounds highly promising plus, if you ask it nicely, I’m told it will actually generate ideas for company names. Far as I can tell, though, whatever you choose it’s obligatory to include the word ‘Future’.”
This nonsense first appeared in the June 2024 issue of Portfolio Adviser
