Irish Life Investment Managers (ILIM), the largest asset manager in the State, last year voted against almost 19 per cent of resolutions put forward by management of 5,369 companies in which it was invested internationally, as it continued to increase its focus on environmental, social and governance (ESG) investing.
ILIM’s resolutions dissent rate, contained in its latest annual responsible investment report, was higher than the estimated 10 per cent level of the world’s largest asset managers, dominated by US firms.
“Voting is one part of our activity. Active engagement with companies is an even stronger part of what we are doing,” said ILIM’s chief executive, Patrick Burke. “This is particularly the case in Ireland, given our footprint in the market.”
ILIM is currently engaging with 26 Iseq companies – representing two-thirds of the market cap of the market – on themes spanning environment disclosures and diversity, he said.
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The company, which has more than €100 billion of assets under management (AUM), currently has 49 per cent of its assets in so-called ESG funds, up from 17.6 per cent at the end of 2019. ILIM had about €35 billion of AUM when its parent, Irish Life Group, was bought by Canada-based Great-West Lifeco a decade ago.
Separately, Mr Burke said that ILIM, which has invested €380 million in apartments as they were being developed for the private rental sector (PRS) in recent years, remains interested in this segment of the property, even as international money has moved away from it in the past year.
The National Asset Management Agency (Nama) said on Thursday it had abandoned plans to deliver 400 apartments before it is wound down in 2½ years’ time, as investment in PRS has fallen sharply amid a spike in interest rates in the past year.
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Savills said last month that there were only four investment deals in the Irish PRS sector in the first quarter, down from 13 for the same period in 2021. Aside from the impact of rising interest rates, it said investor interest had also been hit by “negative media attention and interventions”, rising construction costs and rental growth caps.
However, Mr Burke said: “The demand out there for accommodation will ultimately continue to be a key driver for PRS. But the question of how fast money will return to the sector depends on how quickly we get certainty about where interest rates will end up.”
The European Central Bank (ECB) has increased its deposit rate from minus 0.5 per cent last July to 3.5 per cent as of last week. While ECB policymakers have signalled another increase is on next month, the path beyond that is unclear as euro zone inflation is continuing to run at three times the bank’s 2 per cent target.
