Exclusive: More RI redundancies, including seniors, at large asset managers as houses rejig their ESG strategy in light of commercial shifts.
ESG fund flows in the US have now been negative for almost two years.
More bad news I’m afraid in terms of redundancies in the ESG space.
Nuveen and Columbia Threadneedle, two US fund managers with significant European presence, have made members of their responsible investment teams redundant as they re-jig strategy.
Nuveen, the US fund manager, part of the huge TIAA insurance and pensions group, has cut its responsible investment unit in Denver, Colorado, making several of the team redundant.
Nuveen runs $1.2 trillion in assets and says its clients include seven of the ten largest pension funds in the world.
Nuveen told me that it doesn’t comment on individual departures, but from information that I can glean, the Denver team included Marika Christopher, Kelly Hagg, Chloe Barroukh and one other. The names were confirmed by Nuveen.
Some of these team members have already been made redundant.
Marika Christopher, who has been made redundant, was Senior Director, Responsible Investing Strategy, and joined Nuveen just over two years ago. Her Linked-In profile says she was previously Senior Director, Product Strategy & ESG at Janus Henderson Investors, a role she’d held for 4 years 4 months.
Also being made redundant is Kelly Hagg, Senior Managing Director (SMD) Head of RI Strategy and Solutions. Hagg had also been with the Nuveen Denver office for just over two years, according to his Linked-In profile, and was also previously with Janus Henderson for almost 20 years, latterly as Senior Vice President, Global Head of Product Strategy and ESG, Distribution. Prior to that he was a senior investment product specialist.
Chloe Barroukh has been a Senior Analyst, Responsible Investing Strategy at Nuveen since March, 2023. It is understood that Nuveen is examining similar roles for Barroukh and the fourth member of the Denver RI team.
Nuveen told me that the RI restructure was ‘minor’ and made as it concentrates RI leadership within its Chicago, New York and London offices. It said it also did not mean its RI team was not growing. It said the team is now 36-strong globally, its highest ever level, and that the firm is hiring in RI with ambition to double the size of its European team.
The team continues to be led out of New York by Amy Muska O’Brien, its respected Global Head of Responsible Investing, who has been in post for just over 7 years at Nuveen and held similar leadership roles for almost 2 decades at TIAA and prior to that at TIAA-CREF.
Its international RI strategy is led by Sasha Miller, who joined the business from Schroders in London in 2023. Miller has been elevated to Nuveen’s RI leadership team.
Nuveen runs 40 dedicated RI strategies across 8 asset classes with RI assets under management at the end of Q3 at $93bn.
CTI parts company with senior RI head and team members
Columbia Threadneedle Investments (CTI) (AUM) in London has also made a number of RI team members redundant, including senior RI head, Alice Evans, Managing Director, Responsible Investment and social programme lead.
Market sources said Evans was made redundant at the end of October along with what I understand to be a handful of other team members. CTI said it did not comment on redundancies. Evans could not be reached for comment.
According to her Linked-In profile, Evans had been in the role at CTI for two years and six months and joined the firm from BMO Global Asset Management where she had been Co-Head of Responsible Investment for four and a half years.
Evans’ background was as a fund manager to BMO’s Sustainable & Responsible Global Equity funds, and prior to that as a global healthcare sector specialist.
In early 2021, US asset manager Columbia Threadneedle bought the European investment arm of BMO Financial Group of Canada for $845m in cash. BMO itself had bought London-based F&C Asset Management for $708m back in 2014, acquiring a large, historical RI team.
CTI’s core responsible investment team now comprises 22 specialists and is led by Claudia Wearmouth, Global Head of Responsible Investment.
So what’s going on?
It’s important to give some context to these redundancies/reshuffles. They are taking place in a period of pressure and uncertainty for asset managers with regards to sustainability factors in investment and ESG fund inflows.
Attending last week’s Morningstar Sustainable Investing Conference in Amsterdam, I got a good insight into that.
A presentation by Hortense Bioy, Head of Sustainable Investing Research, showed the following chart:
Global assets in ESG strategies rose from around $1trillion in 2020 to about $3.3 trillion by Q3 2024. That’s not to be sniffed at. It indicates a large client base of retail and institutional investors that want their assets managed as sustainably as possible.
However, the chart shows that the lion’s share of that growth was in Europe, as is the overall asset volume.
That said, the second chart below shows that recent global ESG fund flows have been knocked back to more traditional levels since the latter half of 2023, after two to three bumper years.
Indeed, ESG fund flows in the US have now been negative for almost two years.
Clearly, the US ESG pushback has taken a hammer to ESG fund sales stateside. The recent election result will compound that, albeit with a question mark over green investments underpinned by the Inflation Reduction Act.
In Europe, the EU’s ongoing work to stand behind but streamline its work on sustainable finance should maintain ESG investment flows.
The big question, of course, will be how the outcomes of those flows contribute to, and benefit from, creating a more competitive, greener and fairer Europe.