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Lombard Odier Investment Managers launches New Food Systems strategy
Strategy is designed to capture the opportunities associated with the sustainability-driven transformation of Food Systems.
Lombard Odier Investment Managers (“LOIM”) today announces the launch of its New Food Systems strategy. The high conviction equity strategy is designed to capture opportunities associated with the transition to more sustainable food systems, as they move to a model that can nourish the planet, whilst operating within or helping to restore planetary boundaries.
New Food Systems is the latest addition to Lombard Odier’s suite of CLIC® thematic strategies - including Climate Transition, Natural Capital and the TargetNetZero range – as the firm continues to bolster its sustainable investment offering across public and private markets.
The New Food Systems strategy focuses on the agriculture, forestry and other land uses (“AFOLU”) system, which is deemed to be a primary driver of planetary boundaries transgressions as it accounts for 24% of greenhouse gas emissions, 90% of forest degradation, and 25% of biodiversity loss.
There is broad consensus that to address AFOLU’s encroachment on the earth’s stability, 1bn hectares of land must be returned to nature by 2030. To do so, agricultural land—which now claims 50% of all habitable land on earth—must shrink by 20%. The commitment, backed by 115 countries through pledges on climate and biodiversity will catalyse a profound transformation of our food systems.
As the world transitions to a new model that can nourish a growing population, while helping to restore planetary boundaries, we foresee major shifts in the risks and return profiles of hundreds of listed companies operating across the food and agricultural value chains.
The New Food Systems strategy is a well-diversified, high conviction portfolio of 35 to 50 quality companies, selected from three key sub-themes with a clear focus on capturing the upside of the sustainability-driven transformation of food systems:
- Sustainable food production: companies which produce biological and synthetic inputs, and agricultural products (ie. sustainable aquaculture, green fertilisers, new food additives and ingredients)
- Enabling solutions: companies that provide specialised enabling products and services along the value chain (ie. electrified farming equipment, technological solutions for precision agriculture, new forms of food packaging and logistics)
- Sustainable food consumption: consumer-facing companies, manufacturing, retailing and serving food (ie food manufacturers, retailer and restaurants focused on distributing tomorrow’s diets)
The strategy is managed by Conor Walsh (pictured above), who joined LOIM in May 2022 as Lead Portfolio Manager. Conor brings more than 15 years’ expertise in global equity investing, having previously worked at Sanlam and Bank of America. Based in London, Conor will work closely with Alina Donets, Co-PM and LOIM’s Sustainability and Investment Research teams to assess companies set to thrive through sustainability challenges, and with LOIM’s Stewardship team to discharge the Fund’s stewardship responsibilities through active engagement and proxy voting.
LOIM will provide investors with a detailed sustainability report to show the positive impact on society and the planet, and to report on stewardship progress across the portfolio.
Jean-Pascal Porcherot, Co-Head of LOIM and Managing Partner at Lombard Odier said: “Returning 20% of land to nature and improving the quality of the earth’s remaining agricultural land will be a critical part of realigning our economy with the earth systems that support it. This will leapfrog the sustainability-driven transformation of our food systems and unlock a market worth at least $1.5 trillion in annual revenues by 2030.
“At Lombard Odier, sustainability is fundamentally an investment conviction. Our New Food Systems strategy seeks to capture these market opportunities, targeting companies with attractive business models and robust valuations with the objective to generate compelling sustainability-linked alpha returns for investors.”
About Lombard Odier IM
At Lombard Odier Investment Managers, we are rethinkers with one goal in mind. To provide our clients with outstanding investment solutions that meet their needs for the long term and evolve to thrive in the challenging world in which we all live.
We are focused investment specialists, seeking out investment opportunities that lie on less trodden paths, where our diverse and talented team can add genuine, persistent, value to our clients. We constantly rethink what we know and do, innovating to create new strategies and develop new ways of investing.
We believe that the next economic revolution has already begun and that sustainability will be a major driver of returns for the foreseeable future and beyond. For those with the skills to adapt to this new reality, sustainability will create new sources of alpha, open up new investment opportunities and lead to enhanced return and reduced portfolio risk.
Our team of sustainability experts combine sophisticated data sources, academic rigour and technical innovation to create leading-edge, science-based tools that provide unique insights that are available to all our investment professionals.
These unique insights are reflected directly in our growing range of dedicated sustainable investment strategies that are aligned to this core belief - That our economic model must move from being Wasteful, Idle, Lopsided and Dirty to become Circular, Lean, Inclusive and Clean. We call this The CLIC™ Economy.
With more than 180 investment professionals, we are a global business with a network of 13 offices across Europe, Asia and North America and have assets under management of 67 billion CHF (as at 31 March 2022).
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This document has been issued by Lombard Odier Funds (Europe) S.A. a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended; and within the meaning of the EU Directive 2011/61/EU on Alternative Investment Fund Managers (AIFMD). The purpose of the Management Company is the creation, promotion, administration, management and the marketing of Luxembourg and foreign UCITS, alternative investment funds ("AIFs") and other regulated funds, collective investment vehicles or other investment vehicles, as well as the offering of portfolio management and investment advisory services.
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Sources of the figures:
EPA (2020) Global Greenhouse Gas Emissions Data
FAO (2021) COP26: Agricultural expansion drives almost 90 percent of global deforestation
Semenchuk et al. (2022) Relative effects of land conversion and land-use intensity on terrestrial vertebrate diversity
UNEP (2021) UN calls on countries to meet commitments to restore one billion hectares of land
PBL Netherlands Environmental Assessment Agency (2022) The Global Potential for Land Restoration
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