Japan’s Nikko Asset Management and the UK’s Osmosis Holdings, an investment manager that focuses on resource efficiency, have formed a non-binding strategic partnership for distributing the London-based firm’s products, premised on their shared belief that positive climate action should not come at the expense of investment performance.
The deal will give the Nikko Group exclusive distribution rights in the Asia Pacific region, excluding Australia, and non-exclusive distribution rights elsewhere, for Osmosis’ investment products and strategies, including its flagship Osmosis Resource Efficient Core Equity Strategy. This strategy targets excess returns by identifying listed firms that are resource efficient, which Osmosis defines as "carbon emitted, waste generated and water consumed relative to value creation”.
The investment philosophy of Osmosis is based on the view that “companies that are more resource efficient are more likely to outperform their peers over the long term”, and Nikko shares a similar view, the asset managers say in a joint statement on July 7.
Founded in 2009, Osmosis is a research-based quantitative manager which focuses on“delivering better risk-adjusted investment returns with better environmental outcomes”. Its portfolios include sustainable assets in excess of US$14 billion as of June 2023.
Osmosis’ portfolios overweight resource-efficient companies - those which most efficiently use limited resources to create economic value - and underweight inefficient ones, as identified by the firm’s resource efficiency model.
Nikko launched Japan's first socially responsible investment fund in 1999, and continues to expand its Singapore-based global sustainable investment team. It’s one of the first Asia-based managers to qualify as a signatory to the UK Stewardship Code, recognised as the highest global standard of stewardship.
Nikko Asset Management is a consolidated unit of Sumitomo Mitsui Trust Holdings, one of Asia's biggest asset managers with $209 billion of assets under management as of June.