Liontrust plans to tie its ESG and sustainability activities to executive remuneration as it further embeds processes throughout the company.
In its annual results statement, published this morning, Liontrust’s non-executive chair Alastair Barbour said the company planned to make “considerable strides” in the 2022-23 financial year.
“Investors expect Liontrust to explain and evidence its processes with regard to ESG and sustainability,” Barbour said in his chair’s statement for the annual results.
“Liontrust plans to make considerable strides in this space over the next fiscal year. The group is committed to support the Net Zero Asset Managers’ Initiative, to further the integration of ESG considerations into Liontrust’s mainstream investment processes, and to link actions to the group’s strategy, internal governance structures and the executive directors’ remuneration.
“This provides a solid platform on which the group can expand its expertise to ensure that Liontrust’s offering in ESG, and sustainable investment is fit for purpose for the next decade.”
The remuneration policy change comes after shareholders narrowly passed the company’s latest pay plan at Liontrust’s annual general meeting in February, which included a resolution to hike chief executive John Ions’ (pictured) salary to £550k.
Ions said asset managers with a “genuine focus on ESG and sustainable investment will have a stronger tailwind” through short-term market volatility.
He added: “The increased focus on ESG and sustainable investment… will surface the invisible in terms of the various approaches of investors. It will also enable a move from take, make, break to a sustainable future.”
Higher profits
Liontrust posted a profit before tax of £79.3m for the 12 months ending 31 March 2022, according to its annual results.
Liontrust’s assets under management and advice grew by 8.5% during the year to £33.5bn. This was further boosted by the completion of its acquisition of Majedie Asset Management, which brought total assets to £38.7bn as of 1 April.
However, market volatility caused in part by the conflict in Ukraine and rising inflation has since eroded assets to £34.2bn as of 17 June.
Net flows into the business during the year were £2.5bn, a 29% drop from the £3.5bn attracted in 2021.
“The Liontrust investment teams will continue to apply the distinct and robust investment processes that have served them well over the long term,” Ions stated.
“Our teams’ investment processes have been performing as we would expect given the market environment, and the fund managers remain confident about the long-term prospects for the companies in their portfolios.”
The Majedie acquisition expanded Liontrust’s distribution and investment capabilities, Ions continued, and brought Liontrust into the investment trust market through Majedie’s management of the Edinburgh Investment Trust.
The chief executive also indicated that Liontrust would seek to expand distribution in Europe. It launched an Ireland-based sustainable multi-asset fund in October 2021 and has received enquiries about continental access to Majedie’s long/short equity strategy, the Liontrust GF Tortoise Fund, which is also domiciled in Ireland.
