Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the fund listed below, which is established as a segregated fund in accordance with the Insurance Companies Act (Canada).

Schroders recently announced that Katherine Davidson will be leaving in September 2022, after 14 years with the firm. She was the lead Portfolio Manager of the Schroders Global Sustainable Growth Fund (the fund). She has chosen to pursue a lifestyle change with a focus on work-life balance.  Davidson was a key part of the creation, launch and management of the fund.  Davidson helped create the Sustainability Quotient (SQ) framework, Schroder’s proprietary sustainability assessment tool which the fund uses. She also worked with Charles Sommers to make all investment decisions for the strategy. Sommers will be the lead Portfolio Manager of the fund, following Davidson’s departure.  Sommers has been a co-manager on the fund since its inception. 

On July 31, 2022, Scott MacLennan joined Charles Sommers as co-manager of the fund. MacLennan was a European equity fund manager in Schroders’ European Blend team.  MacLennan has been managing institutional European excluding UK portfolios since 2017.  MacLennan had been working closely with Davidson in transitioning information and ownership of the Global Sustainable Growth fund.  MacLennan will continue to do so up to Davidson’s departure.  MacLennan’s focus has been on becoming familiar with the holdings of the fund as well as the investible universe of securities.  Along with the co-management of the fund, MacLennan will oversee the SQ framework and lead product business development efforts. 

Background

In addition to Davidson, Schroders has had a couple of other key departures from its sustainability team. Specifically, Sarah Bratton Hughes, Head of Sustainability, left in December 2021.  Jessica Ground, Global Head of Stewardship, left in June 2020.

Sun Life GRS Investment Solutions’ view

We have added the fund to the Sun Life GRS Watch List under the Additional Monitoring (least severe) category.  Davidson was an architect of both the strategy and the SQ framework.  Davidson has unique knowledge and experience that is not easily replaceable. However, there are six other individuals from the investment and sustainability teams who play a significant role on the fund. Sommers in particular provides continuity and significant experience. Both Sommers and MacLennan have experience on sustainability focused strategies at Schroder.  Additionally, the team of over 100 analysts and 22 sustainable investment professionals provide further support to the fund.

With respect to the senior level departures, Schroders has been an early sustainable investing adopter.  We consider the firm an ESG Leader on our platform. It is reasonable to expect that other investment firms would hire from Schroders’ experienced sustainable investing talent. For the fund in particular, we have some comfort in the continuity provided by Sommers and the support of the broader teams.

We will continue to monitor the team and the fund during and after the transition and provide further updates as needed. 

Questions? 

Please contact your Sun Life Group Retirement Services representative.