The ESG shortlist would be a complement to the firm’s broader recommended list of more than 200 strategies.
Wilshire Associates is building out a recommended list of ESG-focused strategies to complement its much larger roll of high-conviction investment opportunities.
Rob Noe, head of Wilshire’s manager research group, set out the scope of the new list, in a recent interview with Citywire Professional Buyer.
He also outlined hiring plans for the firm, which had $1.3tn under advisement and $93bn under management as of September 30, and talked about the challenges Covid-19 continues to present for his team of nine analysts and for the managers they meet.
The new ESG list will be made up of around 12 strategies, Noe said, and will sit alongside the team’s wider recommended list of about 225 strategies as well as other smaller focus lists for specific categories.
‘We want to make sure that these are going to be strategies that are going to perform well,’ Noe said. ‘So it’s not just that we think they do a great job from an ESG perspective — they have to pass muster from investment due diligence, as well.’
The decision to build out this list comes as ESG strategies have become increasingly popular among a wider set of clients.
There are only ‘a couple strategies so far’ on the high-conviction ESG list, Noe said and Wilshire hopes to add several more over 2022. Where and when the firm stops adding will depend largely on client demand, but the idea is not to let it sprawl, he explained.
‘We’re not going to have 50 names on this list,’ Noe said. ‘We may see some crossover, where names that are on our traditional list, we would consider ESG leader-type strategies anyway.’
‘It’ll be interesting to see because so many firms have really integrated ESG. Maybe five years down the road, everything could be kind of an ESG-leader type of strategy. Things are really evolving kind of quickly here.’
Noe is also hoping to hire a couple of analysts as he expands his nine-member due diligence team. The firm lost a junior analyst within the past year and is looking to fill that role, he explained.
Noe also said the firm was looking to hire someone at the ‘mid-to-senior level.’ Areas where he’s looking to add some specialization include international equity, multi-asset strategies and third-party strategies.
‘The sooner the better, as far as I’m concerned,’ Noe said. ‘Especially for the junior person to kind of have them come on and get them mentored.’
That’s especially important for him in light of Covid-19, which continues to force Noe and his team to rely on virtual meetings and has taken away the ability for new hires to learn by osmosis, he said.
To counteract that, he said he thinks his firm needs to install more formal training and mentoring procedures, given that the remote or at least hybrid work model is likely here to stay, to some degree.
‘There’s still a little bit missing when you’re not meeting people face-to-face, picking up on different body language, [where there are multiple people in a room, where you could talk to a portfolio manager and then maybe see an analyst and how they interact with each other,’ Noe said. ‘Everything is just sterilized when it’s over the screen.’