“One of the preconceptions people have of impact investing is that you have to sacrifice financial returns. We’re trying to disavow people of that preconception. You shouldn’t need to sacrifice financial returns in order to do good. Also, you should be able to put money in today and take it out tomorrow. That’s what the Threadneedle Social Bond strategy is providing, and this should be mainstream.”
— Simon Bond
Simon Bond is Executive Director of Responsible Investment Portfolio Management and until recently, was the portfolio manager of the Threadneedle UK Social Bond Fund and the Threadneedle (Lux) European Social Fund at Columbia Threadneedle Investments, the asset management arm of Ameriprise Financial, which has total assets under management of $593 billion (as of 30 June 2021). With over three and a half decades of experience in the fund management industry, Simon is a recognized specialist in corporate credit.
In this episode, we discuss Simon’s early career, starting as a desk assistant in the investment management department of Hambros Bank under Peter Hill-Wood, and how his enthusiasm and tendency to ask lots of questions led him to work in bonds. We hear how Simon discovered what he calls the soft side of finance, where investing could produce benefits for society. We learn how he conceived of and launched the Threadneedle UK Social Bond Fund and the Threadneedle (Lux) European Social Fund, both of which invest in diversified portfolios of fixed income securities, with social impact criteria. Simon explains how his approach to portfolio management includes positive inclusion, evidence-based decision making, and engagement with management. We also talk about how he integrates social impact into everything he does (including his support of premiership football club Tottenham Hotspur!)
Simon is a Fellow of the Chartered Institute for Securities and Investment and holds the Investment Management Certificate and the General Registered Representatives Certificate.
I really enjoyed my conversation with Simon and I hope you do too.
Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. You can watch the interview on YouTube here.
What was your favorite quote or lesson from this episode? Please let me know in the comments.
SCROLL BELOW FOR LINKS AND SHOW NOTES…
SELECTED LINKS FROM THIS EPISODE:
- Connect with Simon Bond: LinkedIn
- Amundi Social Bond Fund
- Association of British Insurers
- Big Issue
- Carbon Trust
- Carlsberg
- Charities Aid Foundation
- Columbia Threadneedle
- CT European Social Bond Fund
- CT UK Social Bond Fund
- CT US Social Bond Fund
- Forest School
- Golden Lane Housing
- Grantham Institute
- Green Bond Principles
- Green Finance Institute
- Green Gilt
- Green+ Gilt
- Hambros Bank
- Hightown Housing Association
- HSBC
- Iberdrola
- ICMA compliant
- Impact Investing Institute
- NatWest Bank
- Peabody Housing Association
- RCB Bonds
- Transport for London
- UN Sustainable Development Goals
SHOW NOTES:
[00:00] Episode introduction
[07:06] Simon’s background and how he became a bond market expert
[15:02] How Simon’s working class father and “education, education, education” philosophy influenced his outlook
[18:21] Simon’s role and responsibilities at Columbia Threadneedle
[22:50] Positive inclusion mindset and philosophy versus negative exclusion philosophy in responsible investing
[25:00] Simon discusses his three pillars of investing approach: positive inclusion, evidence-based approach, and real engagement
[34:00] Simon’s process for selecting, buying, and assessing bonds
[38:30] The Green Bond Principles and their benefits
[42:16] Benefits of a partnership model and why Simon partnered with the Big Issue
[47:30] Simon’s three focuses for portfolio construction
[51:51] Simon discusses the style bias inherent in a social investment fund
[53:30] Real life examples of investments that meet his fund’s mandate and criteria
[61:20] Combating greenwashing
[67:30] Simon makes the case that the social investment market will catch up with the growth seen in the green bond market
MORE SIMON BOND QUOTES FROM THE INTERVIEW:
“I always say, I got where I am today by asking stupid questions.”
— Simon Bond
“There’s social in the environmental, and there’s environmental in the social. You can’t necessarily have this nice, easy world of saying there’s an E and there’s an S and there’s a G… you’ve got to look at it as a whole.”
— Simon Bond
“If you said to me, how do you go about the process of picking bonds…first and foremost still has to be the financial criteria because ultimately, if you get that wrong, if, in extremis, a company goes bust, you’re neither gonna deliver the financial return, nor are you going to deliver the impact.”
— Simon Bond
“If you take a corporate bond risk, you should expect a corporate bond return. This is investment. This is not philanthropy, it’s not altruism, it’s not charitable endeavor. It’s investment. So you should get the return for the risk that you’re taking.”
— Simon Bond
PEOPLE MENTIONED:
