Chris Berkouwer, Portfolio Manager of the RobecoSAM Net Zero 2050 Climate Equities is our Fund Manager of the Month for October.
When and how did you start your career in the financial industry? Was a role in the investment funds industry always attractive to you?
I joined the Robeco traineeship program back in 2010, after which I landed a position as an equity analyst with Robeco’s Global Equity team. From there I took on various sector analyst roles and eventually serving as a portfolio manager since 2017. Prior to joining Robeco, however, I worked in a totally different field, as a research analyst for a security and defense think tank, based in The Hague.
What is the most exciting thing you have seen in the markets over your years of experience? And the least?
The evolution of sustainability investing over the years has been very exciting. What started out as more of a score-based box-ticking exercise has evolved into a core part of any investment decision-making, with Impact investing perhaps becoming the industry standard in due time. I actually think sustainability has also been somewhat as a savior for active investing, which lost ground to passive as it struggled to differentiate. However, given the far more forward looking approach sustainability investing requires, fundamental active strategies embraced it and found renewed importance. Next to that, perhaps unsurprisingly, but the Covid pandemic, the repercussions from which are still felt today, has truly been a game changer. Obviously not exciting on the societal level, but as an investor a very fascinating period to witness. The intial market drawdown, the subsequent rapid recovery were unprecented and changed the investing landscape markedly.
What key principles drive your investment process and why?
Quality, sustainability, high conviction. Quality is measured by the return on invested capital and the cash flow generation capability of a company, both of which can be reinforced by its sustainability strategy. Taking a longer-term perspective and having high conviction in your investments are important too.
How are you adapting your portfolio to the current situation of the markets?
Our process has always been relatively style agnostic, primarily focused on Quality and sustainability. This actually enables us to find attractive Investments in both the Value and Growth corners of the market. Today’s market environment is not really suited to have an outspoken factor exposure either way, so it’s best to keep your options open, which has served us well from a relative perspective.
What type of companies do you like to include in your portfolio? Do you have any red lines when it comes to selecting an asset for your portfolio?
We really focus on companies generating value over the long-term, those that do business with respect for all stakeholders involved and not just from a financial return perspective. Next to our exclusion policy, we shy away from companies with low returns on invested capital and have no free cash flow generation. Also companies with detrimental business practices from a sustainability point of view will not make it to the portfolio.
How would you describe yourself in 3 words?
Curious. Grounded. Social.
Would you give any advice to anyone wanting to start a career in the asset management industry?
Start investing, even if it’s a paper portfolio. Learn from it, ask many questions. Markets can be brutal, so stay humble and always open-minded to new perspectives and other ideas.