Productivity | Strategy | Profitability
Productivity | Strategy | Profitability
Dr Mirjam Staub-Bisang, PhD - University of Zurich
Independent Capital AG
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Dr. Mirjam Staub-Bisang, MBA, PhD
CEO and Managing Partner, Independent Capital Group AG
An interview with Dr Mirjam Staub-Bisang, CEO and Managing Partner, Indepedent Capital Group AG
Through our special interview with Dr Mirjam Staub-Bisang, CEO and Managing Partner of Independent Capital Group AG,
Executive Global explores the opportunities and challenges presented through Pragmatic Sustainable Investing, as we take an exclusive look at a company dedicated to maximizing sustainable, long-term risk adjusted investment returns for institutional investors, High Net Worth individuals, and their advisors.
Dr Mirjam Staub-Bisang CV
University of Zurich, Switzerland INSEAD, France
1995 Corporate Lawyer
1997 Investment banking (corporate finance/M&A) at Merrill Lynch, London
1998 INSEAD MBA
2000 Private equity investing at Quadrant AG and Swiss Life Private Equity Partners in Zurich
2004 Hedge fund business development Commerzbank, London
2005 Started and led the asset management firm Independent Capital Group Ltd. based in Zurich
2010 Non-executive director in public and private companies and non-profit organisations
- Successful corporate career
in investment management
- Entrepreneurial career establishing a successful asset management and real estate advisory firm
- Accomplished author of financial publications, including
Sustainable Investments for Institutional Investors: Risks, Regulations, Strategies, and Infrastructure as an Asset Class: Investment Strategy, Sustainability, Project Finance and PPP, 2nd edition
- Young Global Leader of the World Economic Forum 2009
Pragmatic Sustainable Investing
EG: What are some of the ways in which your strategy of integrating sustainability criteria into the investment process can lead to optimal risk-adjusted investment returns?
Mirjam Staub-Bisang: Climate change, pollution, resource scarcity, population growth, aging societies, and the rising economic activity of newly industrializing countries will challenge sustainable development and impact investment performance. “Pragmatic sustainable investing” is our firm’s market-oriented response to the challenges and “megatrends” of our times – not ideology, not a vote for intervention or regulation, but rather an intelligent investment approach whereby we integrate sustainability considerations across asset classes with the goal of maximizing long-term, risk-adjusted investment performance, both through more comprehensive risk management and by realizing investment opportunities resulting from long-term sustainability megatrends. Sustainability criteria relate to environmental, social, or governance issues such as wasting natural resources, energy inefficiency, pollution, labor conditions, and corruption, and the related risks and opportunities.For real estate investments, for example, we look at the long-term sustainability of buildings, and in that context, not only at resource efficiency (energy, water) but also at how well buildings are connected to public transportation or how surfaces can be transformed for a different use in the future – for example, when family apartments give way to smaller apartments for older people.
EG: Why does this strategy makes sense over other investment strategies?
MSB: Sustainable investment strategies work for long-term investors as we do not know when sustainability risks will actually materialize. Moreover, megatrend investments are long-term bets that should not be questioned every quarter.
EG: How much resistance may this type of investment meet with traditionalists accustomed to high-yield investments or concerned about below-market performance?
MSB: Our pragmatic sustainable investing approach should lead to above-market risk-adjusted performance in the long term due to more comprehensive risk management and realizing investment opportunities in asset allocation and investment selection. Investments that benefit from demographic, environmental, or social megatrends are return drivers of a portfolio as such companies are active in growth markets. Real estate, infrastructure, or private equity investments, provide steady returns and outperform conventional bonds significantly.
EG: In what ways would you say public pension funds in particular are leading sustainable investment initiatives, and why?
MSB: Some of the world’s largest sovereign wealth and pension funds have been long-term sustainable investors, including the Norwegian Government Pension Fund or CalPERS, the largest U.S. pension plan. They all incorporate environmental, social, and governance (ESG) considerations into their investment process and follow an active shareholder approach focusing on governance issues. Generally, they expect a higher and more stable, long-term return and, additionally, a responsible return. As universal investors – long-term owners of a diversified investment portfolio spread across the entire market – they have an interest in the quality and continuity of the global investment universe.
Qualified Investors and Megatrends
EG: What fundamental issues do you feel that institutional investors need to consider when allocating investment capital to remain both socially conscious and profitable?
MSB: Due to their fiduciary duty, institutional investors such as pension funds are obliged to maximize the long-term investment returns for their beneficiaries. Hence, they may not follow an investment approach that would result in lower returns, such as excluding substantial parts of the investment universe based on ethical considerations. They may however decide to abstain from investments based on the assessment of sustainability risks, but should not for purely ethical reasons.
EG: You manage a number of equity funds that center around megatrend investment funds. What future challenges and opportunities do you see in the market for qualified investors within the next 5-10 years?
MSB: A major challenge for private and institutional investors is the current and possibly ongoing low-interest-rate environment – with even negative interest rates in Switzerland. Investors shift toward higher allocations to equities and alternative investments. In equities we favor thematic investments which benefit from global megatrends such as resource efficiency, clean environment or changing demographics.
EG: How difficult is the process of shifting high net worth clients from traditional investment streams to a portfolio of pragmatic sustainable investments?
MSB: When it comes to sustainable and responsible investing, we see two extremes. First, there are investors who favor a sustainable investment approach out of conviction, mainly based on ethical beliefs. They do not need to be convinced; they ask for it. For such investors, sustainability aspects come first, and investment performance comes second. Second, there are many high net worth investors, who focus solely on strong investment results. They can only be convinced with actual investment results of client portfolios or investment products.
EG: How do Swiss clients respond to the idea of investment as a social responsibility?
MSB: The investment volume of sustainable investments has been growing steadily, both for private and institutional clients. The more professionally managed investment products are available on the market, the easier it is for clients to choose a suitable investment product that matches their investment needs.
EG: Drawing on your book Sustainability as an Imperative of Entrepreneurial Investing (2012), please tell us how your approach to implementing sustainability-driven investments can foster entrepreneurship while benefiting wealthy families?
MSB: We see many family offices that lead venture capital investments while backing talented entrepreneurs and harvesting attractive returns. They like to invest in sustainable infrastructure like wind or solar energy, for example, or support technological developments for a cleaner world. In that context, a sizeable German family office comes to my mind, that invests large sums of capital in the development of storage solutions for renewable energy. Family offices also like microfinance investments which foster social development in emerging economies by providing microloans to primarily female entrepreneurs.
Dr. Mirjam Staub-Bisang's
Efficient decision-making processes, short reporting lines.
It’s perfect execution that leads
a strategy to success.
Focus on growing the top line while keeping costs under constant review.
Dr. Mirjam Staub-Bisang, Ph.D. was an Investment Manager at Swiss Life Private Equity Partners Ltd.
Before joining Swiss Life Private Equity Partners in 2001, Dr. Staub-Bisang was a Vice President and Corporate Development Manager at Quadrant.
At Quadrant, she was responsible for deal generation and execution with primary involvement in a large acquisition of a spin-off business unit of DSM, a Dutch specialty chemicals company.
Dr. Staub-Bisang was formerly a Financial Analyst with Merrill Lynch, based in London, performing valuation, business and financial analysis for European corporates.
She has been a Director of Bellevue Group AG since March 16, 2015. She serves as Director of INSEAD.
A lawyer by training, admitted to the Zurich Bar, Dr. Staub-Bisang acted for corporate and private clients at a large Zurich firm. She holds a Ph.D. in law from the University of Zurich and an M.B.A from INSEAD.
Corporate Lawyer, Business Leader
EG: In what ways do you deploy the pragmatic sustainable investing strategy when advising clients on effective luxury real estate developments and property acquisitions?
MSB: In property investments, one has to differentiate between investments in (luxury) real estate for private use versus for investment purposes only. The former is more like buying art: Traditional valuation approaches do not apply, as the achievable yield may be very low. The market value is simply what someone else is willing to pay for the asset and this may not be sustainable. When buying into real estate for investment purposes, long-term sustainability becomes important. Here, the building and its resource efficiency and flexibility may matter, but location becomes even more critical. Where is the property situated? Are demographic and economic trends favorable? For coastal regions, vulnerability to climate hazards is also very relevant.
EG: You have a doctor of law from the University of Zurich and an MBA from INSEAD. In what ways has your academic track record prepared you to handle the challenges of international finance and business?
MSB: My background as a lawyer has prepared me to be alert to any legal issues emerging in private market transactions, whether in private equity or real estate investments. While pursuing my MBA at INSEAD, I learned to assess businesses in terms of both their strategy and their economic sustainability. The way I look at any investment opportunity is guided by a comprehensive assessment of risks and opportunities.
EG: How does your experience occupying senior positions in investment banking and hedge funds asset management at prestigious companies such as Commerzbank, Merrill Lynch, and Swiss Life Equity Partners ensure that clients derive the maximum benefit from your expertise?
MSB: My diverse investment experience across asset classes is quite rare and benefits me when advising clients or in my role as a member of investment committees of institutions, such as pension funds and endowments. Having executed M&A, corporate finance, and private equity transactions helps me to assess private investments in illiquid asset classes such as infrastructure, real estate, private equity, or venture capital. Structuring hedge fund portfolios provided me with broad knowledge across many trading strategies in liquid and illiquid bond and equity markets. With the specialists in our firm, we offer comprehensive investment advice and solutions across asset classes for private and institutional investors. Our family office mandates provide us with much insight into diverse yet best-in-class approaches of ultra-high net worth individuals. EG
Dr. Mirjam Staub-Bisang, PhD, is the author of Sustainable Investing for Institutional Investors: Risk, Regulations, and Strategies; Sustainability as an Imperative of Entrepreneurial Investing; and the 2nd edition of Infrastructure as an Asset Class: Investment Strategy, Sustainability, Project Finance, and PPP. She is the CEO and Managing Partner of Independent Capital Group AG and a
Young Global Leader of the World Economic Forum.
To find out more information about Independent Capital Group, please visit www.independent-capital.com