TerreNeuve
Investing in the sustainability movement: an alternative approach.
Sustainability is the defining principle of today’s world and is a key driver of long-term value creation. Understanding sustainability issues is critical in distinguishing advantaged versus challenged business models and uncovering both risks and opportunities.
This Sub-Fund adopts a “long/short” approach to sustainable investing. It aims to benefit from both the potential future growth of well-positioned companies (via “long” positions) and the future weak performance of firms that are ill-equipped for the sustainability movement (via “short” positions).
The approach also aims to offer investors a smoother returns path – one that is not closely tied to the movements of stock markets.
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| Food quality and security Companies involved in nutrition, novel production techniques and crop yield enhancement; the ‘vegetalisation’ of diets | The future of mobility Businesses involved in emissions control, energy efficiency, hydrogen as a storage solution for intermittent renewable electricity |
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| An ageing population Firms providing medical devices and services, specialised nutrition, incontinence companies | Chemical development Enabling lower resource intensity or green chemistry, recycling technologies and bioplastics |
Why invest?
Our alternative approach not only looks to take advantage of firms that are well positioned from long-term sustainability trends, but also from those that are poorly positioned.
Broad investment opportunities.
In a world where growth can be scarce, we believe that companies strategically positioned to address key environmental and social challenges will be the biggest beneficiaries in the market.
We also believe that the majority of corporate failures in public equity markets are related to governance and management issues.
While many investors take a short-term view on investing, we take a long-term approach. We carry out deep, fundamental, bottom up analysis which looks to identify and measure significant long-term drivers of company valuation, including less tangible environmental, social and/or governance factors.
Examples of our sustainable investing themes.
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| Food quality and security Health and well-being is one area where the movement towards a more sustainable world is most evident. The adoption of a healthy diet is becoming increasingly important for many developing nations around the world. In addition, Millennials account for a large proportion of the growing demand for healthy, responsibly resourced and packaged products – we see an opportunity in companies supporting this trend.1 |
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| The future of mobility Hydrogen offers tremendous potential, firstly as a zero carbon superfuel to power the next mobility revolution, and secondly as a storage solution for intermittent renewable electricity. This technology is already being adopted globally and we believe that companies at the forefront of this energy revolution offer a compelling investment opportunity.2 |
Sources:
1 Healthy eating is increasing on consumer’s agendas, with millennials leading the way, PwC Blogs, 26 August 2016.
2 Hydrogen & Fuel Cell, National Renewables Energy Laboratory www.nrel.gov/hydrogen.
Investment philosophy and strategy.
| 1 | Deep sector expertise The Sub-Fund operates with a sector specialist approach focusing on Consumer Discretionary, Consumer Staples, Materials and Medtech. These sectors are global in nature allowing the team to leverage their insights gained in European markets across the globe. The investment team have covered their focus stocks for their entire careers and have developed meaningful corporate relationships. This is a key element of the company due diligence process and provides them with valuable insights into wider sectoral trends. |
| 2 | Environmental, Social and Governance analysis The team utilises a proprietary sustainability rating system it has developed which forms an integral part of idea generation and the overall investment process. The sustainability rating system acts as an extended company due diligence process ensuring the team carry out analysis on all the ESG factors they deem material to the investment case. A key pillar of the team’s research is analysing a company’s portfolio of goods and services and how they align with wider Environmental and Social trends or themes. |
| 3 | Sustainability as a return driver Companies strategically positioned to address key environmental and social challenges may be amongst the biggest beneficiaries. Conversely, understanding challenged business models should facilitate the avoidance of value traps and offers opportunities on the short side. |
Investment team.
 | Arnaud Langlois Portfolio Manager, London |
 | Cyrus Azarmgin Senior Analyst, London |
Sub-fund information.
Sustainability-accredited.
The strategy was accredited by the ‘Towards Sustainability’ quality standard in November 2020 / February 2021, in recognition of our robust sustainability framework, analysis and stewardship approach.
Source: www.towardssustainability.be. The quality standard is developed on the initiative of Febelfin. Awards and ratings subject to change without notice. The Central Labelling Agency (CLA) assumes no responsibility and shall not be liable for the noncompliance with applicable rules and regulations regarding, among others but not limited to, the marketing of financial instruments by a product provider, a financial institution or any other market participant or party who uses the ‘Towards Sustainability’ label.
contact us.
Important information.
Lombard Odier Funds(hereinafter the “Fund”) is a Luxembourg investment company with variable capital (SICAV).The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as an Undertaking for Collective Investments in Transferable Securities UCITS under Part I of the Luxembourg law of the 17 December 2010 implementing the European directive 2009/65/EC, as amended (“UCITS Directive”). The Management Company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (SA), having its registered office at 291, route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg, authorised and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended. This marketing document relates to “TerreNeuve”, a Sub-Fund of Lombard Odier Funds (hereinafter the “Sub-Fund”). This marketing communication was prepared by Lombard Odier Asset Management (Europe) Limited. The prospectus, the articles of incorporation ,the Key Investor Information Documents, the subscription form and the most recent annual and semi-annual reports are the only official offering documents of the Sub-Fund’s shares (the “Offering Documents”). The Offering Documents are available in English, French, German and Italian at www. loim.com and can be requested free of charge at the registered office of the Sub-Fund in Luxembourg: 291 route d’Arlon, 1150 Luxembourg, Grand Duchy of Luxembourg. The information contained in this marketing communication does not take into account any individual’s specific circumstances, objectives or needs and does not constitute research or that any investment strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes a personal investment advice to any investor. This marketing communication is not intended to substitute any professional advice on investment in financial products. Before making an investment in the Sub-Fund, an investor should read the entire Offering Documents, and in particular the risk factors pertaining to an investment in the Sub- Fund. We would like to draw the investor’s attention toward the long-term nature of delivering returns across the economic cycle and the use of financial derivative instruments as part of the investment strategy may result in a higher level of leverage and increase the overall risk exposure of the Sub-Fund and the volatility of its Net Asset Value. Investors should take care to assess the suitability of such investment to his/her particular risk profile and circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. There can be no assurance that the Sub-Fund’s investment objective will be achieved or that there will be a return on capital. Past performance is not a reliable indicator of future results. Where the Sub-Fund is denominated in a currency other than an investor’s base currency, changes in the rate of exchange may have an adverse effect on price and income. Please take note of the risk factors. Any benchmarks/indices cited herein are provided for information purposes only. No benchmark/ index is directly comparable to the investment objectives, strategy or universe of a Sub-Fund. The performance of a benchmark shall not be indicative of past or future performance of any Sub-Fund. It should not be assumed that the relevant Sub-Fund will invest in any specific securities that comprise any index, nor should it be understood to mean that there is a correlation between such Sub-Fund’s returns and any index returns. Target performance/risk represents a portfolio construction goal. It does not represent past performance/risk and may not be representative of actual future performance/risk. The information and analysis contained herein are based on sources considered to be reliable. Lombard Odier makes its best efforts to ensure the timeliness, accuracy, and completeness of the information contained in this marketing communication. Nevertheless, all information and opinions as well as the prices, market valuations and calculations indicated herein may change without notice. Source of the figures: Unless otherwise stated, figures are prepared by Lombard Odier Asset Management (Europe) Limited. The tax treatment depends on the individual circumstances of each client and may be subject to change in the future. Lombard Odier does not provide tax advice and it is up to each investor to consult with its own tax advisors. NOTICE TO RESIDENTS IN THE FOLLOWING COUNTRIES: Austria – Paying agent: Erste Bank der österreichischen Sparkassen AG. Belgium – Financial Services Provider: CACEIS Belgium S.A. Please contact your tax advisor to identify the impacts of the Belgian tax “TOB” (“Taxe sur les Operations Boursières”) on your transactions, as well as the impacts of the withholding tax (“Précomptes mobiliers”). Lombard Odier has an internal Complaints Management Service. You can lodge a claim via your Relationship Manager or directly to Lombard Odier (Europe) S.A. Luxembourg, Belgium Branch, Claim Management Service, Avenue Louise 81, Box 12, 1050 Brussels, Fax: (+32) 2 543 08. Alternatively you can address your complaint free of charge to the national complaint service in Belgium, OMBUDSMAN: North Gate II, Boulevard du Roi Albert II, n°8 Boîte 2 2, 1000 Brussels, Tel : (+32) 2 545 77 70, Fax : (+32) 2 545 77 79, Email: Ombudsman@ Ombusfin.be. France – Centralising agent: CACEIS Bank. Germany – Paying agent: DekaBank Deutsche Girozentrale. Italy – Paying agents: Société Générale Securities Services S.p.A., State Street Bank International GmbH – Succursale Italia, Banca Sella Holding S.p.A., Allfunds Bank S.A., Italian Branch, BNP Paribas Securities Services, CACEIS Bank Italy Branch. Liechtenstein – Paying agent: LGT Bank AG. Luxembourg – Custodian, central administration agent, registrar, transfer Agent, paying agent and listing agent: CACEIS Bank, Luxembourg Branch. Netherlands – Paying agent: Lombard Odier Asset Management (Europe) Ltd, Netherlands Branch. Spain – Paying agent: Allfunds Bank S.A. – CNMV Number: 498. Sweden – Paying agent: Skandinaviska Enskilda Banken AB (publ). Switzerland – The Sub-Fund is registered with the Swiss Federal Financial Market Supervisory Authority (FINMA). The Offering Documents together with the other Shareholders’ information are available free of charge at the Swiss Representative: Lombard Odier Asset Management (Switzerland) S.A., 6, avenue des Morgines, 1213 Petit-Lancy, Switzerland. Swiss Paying Agent: Banque Lombard Odier & Cie SA. 11, rue de la Corraterie 1204 Genève, Switzerland. Publications about the Sub-Fund: www.fundinfo.com. The issue and redemption prices and/or the net asset value (with the mention “excluding commissions”) of the Share classes distributed in Switzerland: www.swissfunddata.ch and www. fundinfo.com. Bank Lombard Odier & Co Ltd is a bank and securities dealer authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA). United Kingdom – This document is a financial promotion and has been approved for the purposes of Section 21 of the Financial Services and Markets Act 2000, by Lombard Odier Asset Management (Europe) Limited. It is approved for distribution by Lombard Odier (Europe) S.A., London Branch for Retail Clients in the United Kingdom. The Sub-Fund is a Recognised scheme in the United Kingdom under the Financial Services and Markets Act 2000. UK regulation for the protection of retail clients in the UK and the compensation available under the UK Financial Services Compensation scheme does not apply in respect of any investment or services provided by an overseas person. UK facilities agent: Lombard Odier Asset Management (Europe) Limited. Lombard Odier (Europe) S.A. UK Branch is a credit institution regulated in the UK by the Prudential Regulation Authority (PRA) and subject to limited regulation by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). Details of the extent of our authorisation and regulation by the PRA and regulation by the FCA are available from us on request. European Union Members: This marketing communication has been approved for issue by Lombard Odier (Europe) S.A. The entity is a credit institution authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. Lombard Odier (Europe) S.A. branches are operating in the following territories: France: Lombard Odier (Europe). S.A. Succursale en France, a credit institution under limited supervision in France by the Autorité de contrôle prudentiel et de résolution (ACPR) and by the Autorité des marchés financiers(AMF) in respect of its investment services activities; Spain: Lombard Odier (Europe) S.A. Sucursal en España, Lombard Odier Gestión (España) S.G.I.I.C., S.A.U., credit institutions under limited supervision in Spain by the Banco de España and the Comisión Nacional del Mercado de Valores (CNMV). United States: Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States or given to any US person. This marketing communication may not be reproduced (in whole or in part), transmitted, modified, or used for any public or commercial purpose without the prior written permission of Lombard Odier. Towards sustainability label is based on specific quantitative and qualitative rules referred as Quality Standards. It requires exclusion of the financing of a limited number of practices that are widely regarded as unsustainable. The quality standard does not stipulate how the requirements should be fulfilled in practice: this is left to the expertise of the product manager. The standard provides a mix of exclusion, impact, engagement, transparency and accountability. The balance of these elements and the specific requirements associated, will evolve and be adapted over time to reflect the evolving expectations of investors and the needs of society, and the legislative translation of these needs and expectations. As such, the quality standard is not fixed and shall be evaluated regularly in a multistakeholder context. Independent supervision by the Central Labeling Agency (CLA) protects the integrity of the quality standard and the label, and will manage their continuing development.
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