Natural capital: an untapped investment opportunity.

Natural capital: an untapped investment opportunity.

For the first time, there is the opportunity to invest in companies that leverage the regenerative power of nature – Natural Capital. We believe these companies will deliver strong growth and become the winners of the future.

Nature is the most productive asset of our economy. Our current, linear economic model is dangerously depleting this asset, despite its regenerative nature. This is a huge risk for global economic activity.

However, powerful forces, enabled by technology and innovation, are now pushing for this linear model to evolve into a new circular economy that is harnessing the power of nature on the one hand and preserving it on the other.

This profound metamorphosis from linear into a new circular model is first and foremost driven by value creation and simply better economics.

 

sub-fund information.

Click here to access the sub-fund information.


The metamorphosis from an outdated linear model to a new circular economy

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Source: LOIM. For illustrative purposes only.

We believe we have identified an untapped investment opportunity that will deliver strong returns for investors over the long term

Introducing LO Funds – Natural Capital1

LO Funds – Natural Capital1 gives investors the opportunity to benefit from the growth potential arising from companies that are harnessing the productive and regenerative aspects of nature via the circular bio-economy and from the need to preserve natural capital by transitioning to a leaner form of industry.

 

 

Four growth opportunities powered by Natural Capital

Circular bio-economy

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Biomaterials
Smart farming
Water solutions

Resource efficiency

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Performance materials
Industrial automation 
(Industry 4.0)

Outcome-orientated economy

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Sharing and repair
Outdoor activities
Dematerialisation
Green & innovative finance

Zero-waste

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Waste & Recycling
Innovative infra 
& urbanisation
Smart food supply chains

 

We select companies that are already profitable and positioned to take advantage of these four growth opportunities.

 

From a stewardship angle, companies are encouraged to set clear, measurable objectives, provide relevant disclosures and have appropriate governance structures addressing natural capital and other ESG matters. We will engage and exercise our voting rights to promote the protection of natural capital and we will report on stewardship progress across the portfolio. Lombard Odier IM will also provide investors with a sustainability report to show the positive impact on nature that investment in these companies brings to society and the planet.

 

Portfolio characteristics

  • A global high conviction portfolio of 40-50 companies, with a small to mid-cap bias

  • Multi-sectors with a bias towards Industrials, Information Technology, Materials

  • Stronger growth (>300bps) and ROE (>50%) than the MSCI WORLD SMID Cap1

  • Expected tracking error 5-6%, and active share >90%

  • Expected excess return vs index 2.5-3% pa2

  • No material regional or FX divergences

 

Why LOIM?

LOIM has deep expertise in sustainable investing, managing in excess of USD 1.7 billion3 in dedicated sustainable strategies. We have been embedding sophisticated proprietary ESG tools that focus on companies’ business practices into our investment portfolios for more than 20 years.

Our experienced sustainable investing and research team comprises ten sustainability experts, including 5 PhDs, with specialties spanning economics, policy, sustainable financing solutions, mobility, climate change, circular bio-economy, carbon pricing, geospatial analysis and environmental engineering. The team combines sophisticated data sources, technical innovation and pioneering academic research from our partnership with Oxford University, to create science-based tools that provide unique insights that form a core component of the investment process for this fund.

Our equity investment team is broad-based and highly experienced, managing USD 10.3 billion3 in total and USD 2.7 billion3 in sustainability and thematic strategies. Led by Didier Rabattu, the LOIM Global Equity team has delivered strong relative performance through the crises of 20202, using its proprietary investment framework.

The Natural Capital fund will be managed by the same sustainability thematics investment team as our successful Climate Transition strategy. This strategy launched in March 2020 and now has more than USD 500 million3 under management.

investment team.

LOcom_AuthorsAM-Donets.png Alina Donets, CFA
Lead Portfolio Manager
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Paul Udall
Portfolio Manager

LOcom_AuthorsAM-Meunier.png François Meunier
Portfolio Manager
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Dr Christopher Kaminker
Head of Sustainable Investment Research, Strategy & Stewardship

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Rebeca Coriat
Head of Stewardship

 

sub-fund information.

Click here to access the sub-fund information.

 

sources.

1 Source: LOIM. For illustrative purposes only. The information provided in this document might be subject to change. 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. No benchmark is directly comparable in terms of universe and composition to a given Sub-Fund. However, the Sub-fund uses the MSCI World SMID Cap TR ND for performance and internal risk indicators comparison. 
2 These figures are forecasts. There is no guarantee that the fund will reach these results
3 Source: LOIM. AUM data as at 31 August 2020

 

important information.

This marketing document is 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.
Lombard Odier Investment Managers (“LOIM”) is a trade name.
The Fund is authorised and regulated by the Luxembourg Supervisory Authority of the Financial Sector (CSSF) as a UCITS within the meaning of EU Directive 2009/65/EC, as amended. The management company of the Fund is Lombard Odier Funds (Europe) S.A. (hereinafter the “Management Company”), a Luxembourg based public limited company (Société Anonyme SA), having its registered office at 291, route d’Arlon, L-1150 Luxembourg, authorized and regulated by the CSSF as a Management Company within the meaning of EU Directive 2009/65/EC, as amended. The Fund is only registered for public offering in certain jurisdictions. The articles of association, the prospectus, the Key Investor Information Document, the subscription form and the most recent annual and semi-annual reports are the only official offering documents of the Fund’s shares (the “Offering Documents”). They are available on http//www.loim.com or can be requested free of charge at the registered office of the Fund or of the Management Company, from the distributors of the Fund or from the local representatives as mentioned below.
Austria. Supervisory Authority: Finanzmarktaufsicht (FMA), Representative: Erste Bank der österreichischen Sparkassen AG, Am Belvedere 1, 1100 Vienna - Belgium. Financial services Provider: CACEIS Belgium S.A., Avenue du Port 86C, b320, 1000 Brussels - Germany. Supervisory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Representative: DekaBank Deutsche Girozentrale, Mainzer Landstraße 16, D-60325 Frankfurt am Main - Italy. Supervisory Authority: Banca d’Italia (BOI) / ConSob, Paying Agents: Société Générale Securities Services S.p.A., Via Benigno Crespi, 19/A - MAC 2, 20159 Milano, State Street Bank International GmbH - Succursale Italia, Via Ferrante Aporti, 10, 20125 Milano, Banca Sella Holding S.p.A., Piazza Gaudenzio Sella, 1, 13900 Biella, Allfunds Bank S.A.U., Milan Branch,Via Bocchetto 6, 20123 Milano, BNP Paribas Securities Services, With its registered office in Paris, rue d'Antin, 3, and operating via its Milan subsidiary at Piazza Lina Bo Bardi, 3, 20124 Milan - Liechtenstein. Supervisory Authority: Finanzmarktaufsicht Liechtenstein (“FMA”), Representative, LGT Bank AG Herrengasse 12, 9490 Vaduz - Netherlands. Supervisory Authority: Autoriteit Financiële Markten (AFM). Representative: Lombard Odier Funds (Europe) S.A. – Dutch Branch, Gustav Mahlerlaan 1212, NoMa House, 1081 LA Amsterdam - Spain. Supervisory Authority: Comisión Nacional del Mercado de Valores (CNMV), Representative: Allfunds Bank, S.A.U. C/ de los Padres Dominicos, 7, 28050, Madrid – Sweden. Supervisory Authoriy: Finans Inspektionen (FI). Representative: SKANDINAVISKA ENSKILDA BANKEN AB (publ), Kungsträdgårdsgatan, SE-106 40 Stockholm – Switzerland. Supervisory Authority: FINMA (Autorité fédérale de surveillance des marchés financiers), Representative: Lombard Odier Asset Management (Switzerland) SA, 6 av. des Morgines, 1213 Petit-Lancy; Paying agent: Bank Lombard Odier & Co Ltd, 11 rue de la Corraterie, CH-1204 Geneva. UK. Supervisory Authority: Financial Conduct Authority (FCA), Representative: Lombard Odier Asset Management (Europe) Limited, Queensberry House, 3 Old Burlington Street, London W1S3AB
European Union Members: This marketing communication has been approved for use in Belgium: Lombard Odier (Europe) S.A. Luxembourg • Belgium branch; Italy: Lombard Odier (Europe) S.A. • Italian Branch; Spain: Lombard Odier (Europe) S.A. • Sucursal en España; and United Kingdom: Lombard Odier (Europe) S.A. • UK Branch. Lombard Odier (Europe) S.A is a credit institution authorised and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. Notice to investors in the United Kingdom: Lombard Odier (Europe) S.A. • UK Branch is authorised in the UK by the Prudential Regulation Authorities (PRA) and is subject to limited regulation by the Financial Conduct Authority (‘FCA’) and the PRA. Details of the extent of our authorisation and regulation by the PRA and regulation by the FCA are available from us on request. 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. In addition, this marketing communication has also been approved for use by the following entity domiciled within the European Union: Spain: Lombard Odier Gestión (España) S.G.I.I.C., S.A.U., an investment management company authorised and regulated by the Comisión Nacional del Mercado de Valores (CNMV), Spain.
Switzerland: This marketing communication has been approved for use in Switzerland by Bank Lombard Odier & Co Ltd Geneva, a bank and securities dealer authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA).
NOTICE TO RESIDENTS OF THE UNITED KINGDOM The Fund is a Recognised Scheme in the United Kingdom under the Financial Services & Markets Act 2000. Potential investors in the United Kingdom are advised that none of the protections afforded by the United Kingdom regulatory system will apply to an investment in LO Funds and that compensation will not generally be available under the Financial Services Compensation Scheme. This document does not itself constitute an offer to provide discretionary or non-discretionary investment management or advisory services, otherwise than pursuant to an agreement in compliance with applicable laws, rules and regulations.
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An investment in the Fund is not suitable for all investors. There can be no assurance that the Fund's investment objective will be achieved or that there will be a return on capital. Past or estimated performance is not necessarily indicative of future results and no assurance can be made that profits will be achieved or that substantial losses will not be incurred. Where the 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. All performance figures reflect the reinvestment of interest and dividends and do not take account the commissions and costs incurred on the issue and redemption of shares/units; performance figures are estimated and unaudited. Net performance shows the performance net of fees and expenses for the relevant fund/share class over the reference period. This document does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before making an investment in the Fund, an investor should read the entire Offering Documents, and in particular the risk factors pertaining to an investment in the Fund, consider carefully the suitability of such investment to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This document contains the opinions of LOIM, as at the date of issue. The information and analysis contained herein are based on sources believed to be reliable. However, LOIM does not guarantee the timeliness, accuracy, or completeness of the information contained in this document, nor does it accept any liability for any loss or damage resulting from its use. All information and opinions as well as the prices indicated may change without notice. Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.
Source of the figures: Unless otherwise stated, figures are prepared by LOIM.
Source of the figures: Unless otherwise stated, figures are prepared by LOIM.
Important information on performance 
Past performance is not a guarantee of future results. 
Where the 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. All performance figures reflect the reinvestment of interest and dividends and do not take account the commissions and costs incurred on the issue and redemption of shares/units; performance figures are estimated and unaudited. Net performance shows the performance net of fees and expenses for the relevant fund/share class over the reference period. Source of the figures: Unless otherwise stated, figures are prepared by LOIM.
Important information on benchmarks. 
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 fund. The performance of a benchmark shall not be indicative of past or future performance of any fund. It should not be assumed that the relevant 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 fund’s returns and any index returns.
Important information on portfolio composition: The portfolio information provided in this document is for illustrative purposes only and does not purport to be recommendation of an investment in, or a comprehensive statement of all of the factors or considerations which may be relevant to an investment in the referenced securities. They illustrate the investment process undertaken by the manager in respect of a certain type of investment, but may not be representative of the Fund's past or future portfolio of investments as a whole and 
it should be understood that they will not of themselves be sufficient to give a clear and balanced view of the investment process undertaken by the manager or of the composition of the investment portfolio of the Fund.                                                         
As the case may be, further information regarding the calculation methodology and the contribution of each holding in the representative account to the overall account’s performance can be obtained by the Fund or the Management Company. Holdings and/or allocations are subject to change. If the funds are denominated in a currency other than that in which the majority of the investor’s assets are held, the investor should be aware that changes in rates of exchange may affect the value of the funds’ underlying assets. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.
The strategy may include the use of derivatives. Derivatives often involve a high degree of financial risk because a relatively small movement in the price of the underlying security or benchmark may result in a disproportionately large movement in the price of the derivative and are not suitable for all investors. No representation regarding the suitability of these instruments and strategies for a particular investor is made.
Concentration risks: Because of the smaller number of stocks held in the portfolio, the Fund may be subject to greater risks than a more diversified fund. A change in value of any single holding may affect the overall value of the portfolio more than it would affect a diversified fund that holds more investments.
If the funds are denominated in a currency other than that in which the majority of the investors assets are held, the investor should be aware that changes in rates of exchange may affect the value of the funds underlying assets. The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.
Although certain information has been obtained from public sources believed to be reliable, without independent verification, we cannot guarantee its accuracy or the completeness of all information available from public sources.
No part of this material may be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorised agent of the recipient, without Lombard Odier Funds (Europe) S.A. prior consent. In Luxembourg, this material is a marketing material and has been approved by Lombard Odier Funds (Europe) S.A. which is authorized and regulated by the CSSF.
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