Dorval Asset Management achieves French government Relance accreditation for its Dorval Manageurs Small Cap Euro fund

Dorval Asset Management marks a new stage in its development and achieves the French Relance accreditation – a government program designed to fund the French economic recovery – for its Dorval Manageurs Small Cap Euro fund, heralding its strong commitment to garnering private investment to bolster companies’ capital. Dorval Manageurs Small Cap Euro’s investment and shareholder engagement policy is driven by environmental, social and good governance requirements and offers savers the opportunity to bring meaning to their investment by financing the recovery and fostering a more sustainable economy as they invest in listed French and European SMEs and mid-sized firms.

Transition to responsible and sustainable investments

Dorval Asset Management further steps up its commitment to a responsible and sustainable investment policy, as it is mindful of companies’ funding needs and their requirement for stronger capital to address the effects of the pandemic-related crisis: this fresh impetus seeks to encourage real economy stakeholders and support them in adapting their environmental, social and governance practices to address savers’ changing consumer behavior and meet the needs of the companies that Dorval AM invests in.

Jean-François Baralon, Chief Executive Officer at Dorval Asset Management notes: “Today’s savers are committed to investing in socially responsible, sustainable, useful and environmentally friendly products. This shift goes hand-in-hand with clients’ changing needs as they hold brands and banners to higher standards: companies’ social pledges have now become a testament to their engagement and ethical standards. This new paradigm also applies to financial investment, and here at Dorval AM, our aim is to offer diversified investment solutions that dovetail with our convictions to meet the needs of our clients, who are increasingly engaged in these themes. Achieving the French state Relance accreditation and obtaining the SRI label for our Dorval Manageurs Small Cap Euro fund clearly embody our commitment.”

 

Dorval Manageurs Small Cap Euro devoted to funding listed French and European SMEs and mid-sized firms

Dorval Manageurs Small Cap Euro is eligible for both French equity savings plans and French SME equity savings plans and invests at least 75% of its assets in European shares issued by companies that meet the following criteria: fewer than 5,000 employees, annual revenues of less than €1.5 billion or a balance sheet of below €2 billion. Compliance with these criteria is assessed when the fund invests in the shares in question.

Dorval Manageurs Small Cap Euro aims to outperform its reference indicator, the MSCI EMU Small Cap net total return, calculated with dividends reinvested over a five-year investment horizon.

Our portfolio construction and management are based on three criteria:

·      We identify buoyant investment themes that fit more broadly into current overarching macroeconomic and social trends and address sustainable development themes, while also meeting with market dynamics, asset class valuation and sector economic environment considerations,

·      We pick stocks within these investment themes, and add in securities selected for their intrinsic appeal,

·      We ensure distribution of these stocks within the portfolio, drawing on a proprietary rating methodology built on these same criteria.

 

Our stock ratings combine financial and non-financial analysis, as well as an assessment of the manager-company duo, which appraises executives’ intrinsic quality. Dorval AM’s proprietary ESG methodology is applied to derive an issuer rating in the fund’s investment universe, and is based on the following:

We assess ESG challenges and allocate an in-house weighting after screening for sector-specific, geographical and market cap considerations.
We assign an ESG rating for each issuer based on its exposure to the challenges set out, and the way they are managed by the company.

As part of this process, our portfolio management teams and our financial and non-financial analysts screen for 37 ESG challenges based on a range of qualitative and quantitative indicators, with a particular focus on 12 of these aspects.

 

Governance challenges:

Compliance with the basic principles of corporate governance i.e. quality of board of directors – diversity, independence, skills, representation –, alignment of interests with shareholders, capital structure, consideration for minority shareholders, quality of financial reporting and accounting;
Anti-corruption efforts.

 

Environmental considerations:

Carbon emissions;
Waste management;
Water stress;
Biodiversity and land management.
Opportunities in green technologies and renewable energies.

 

Social aspects:

Labor management;
Staff health and safety management.
Human capital management.
Personal data protection;
Product quality.

Our portfolio managers apply our stringent rating process to assign an ESG score to each stock in our investment universe, which provides direct input for our portfolio construction and the development of our share price objectives.

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