Camden Pension Fund to use pass-through voting solution on pooled funds

The Local Government Pension Scheme (LGPS) fund for Camden has announced it will use a new pass-through voting solution, which will allow to it vote directly in line with its responsible investment values at company shareholder meetings.

Fintech firm Tumelo is enabling the solution being offered by Legal & General Investment Management (LGIM) in a first for a UK asset manager, with Camden Pension Fund being the first client to take advantage of the pass-through voting partnership.

The deal between Tumelo and LGIM allows clients to apply their preferred voting policy to shareholder proposals across their pooled funds.

Previously, clients did not have a direct say on their proportional vote, and while fund managers can take client’s views into account, their voting may not have aligned to client’s preferences.

Furthermore, Tumelo noted that the potential for misalignment was “exacerbated” for clients that were invested in the same securities across several investment managers’ funds, who could potentially vote differently to one another.

The pass-through voting solution aims to enable pooled fund investors to vote their shares in proportion to the value of their investment in the fund and give them flexibility to engage in voting or continue to delegate voting activity to fund managers.

While votes in Camden’s segregated mandate are cast in line with its values through a bespoke voting policy by proxy adviser PIRC, votes attached to its pooled funds were cast by LGIM.

“Since 1996, we have voted equities in segregated mandates with our bespoke vote policy,” commented Camden Pension Fund Pension Committee chair, Rishi Madlani.

“Yet, for pooled funds we have always been forced to accept the fund managers’ policies, which can be different to our own. This has led to misalignment of voting across our portfolio and sometimes with our own responsible investment beliefs.

“That’s why we are proud to be among the first to use pass-through voting on pooled funds. We can now ensure Camden has one, strong voice in the market on the most important issues for the scheme and its members, such as curbing CEO remuneration and combatting the climate crisis.

“We hope our decision will inspire other LGPS funds to embrace pass-through voting to drive alignment across third-party fund managers, maximise the strength of their voice, and ultimately ensure good stewardship is at the heart of their investment process.”

LGIM head of investment stewardship, Michael Marks, described Camden’s adoption of the solution as an “exciting development” and said the asset manager would continue to work closely with all its clients to reflect their views.

“At LGIM, our voting is aligned with our engagement and stewardship policies and we see it as a vital ‘tool’ to escalate our engagement in line with our published policies,” he continued.

“Ultimately, we believe engagement with companies is essential to the overall goal of improving ESG standards in the global markets in which our clients are invested and voting is a key tool in our engagement activity.”

Tumelo CEO, Georgia Stewart, added: “Investors, whether retail or institutional, are becoming increasingly aware of the power they have to make a difference with the companies they invest in.

“At Tumelo we help amplify their voice and ensure their money is working the way they want it to.

“Particularly for institutional investors like pension funds, stewardship is absolutely vital and our technology helps them exercise the pooled voting power they have to make a real difference on behalf of their members.”

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