The new CEO of Wellington Management, a $1.4 trillion asset management firm and a major subadvisor for multiple actively managed Vanguard funds, says investments focused on environmental, social and governance (ESG) factors and sustainability "will dramatically change the structure of the financial markets" in the future.
Speaking at this year's SALT conference in New York City, Jean Hynes explained that ESG and sustainability investing is "an area of a lot of complexity," which is particularly "well suited for active management."
Hynes noted that "active management has a vital role to play" in an environment where interest rates are low, affecting returns in fixed income assets, and the stock market is "where it is now."
The S&P 500 has gained close to 20% year to date and is up almost 34% from a year ago.
"If we can deliver alpha of hundreds of basis points on equities and fifty to a hundred basis points on fixed income and … have the ability to find value in parts of the economic growth that may be private, those are all going to help our end clients," said Hynes, who became CEO on July 1 after spending 30 years at Wellington.
She said the firm also has plans to build its private equity products, which offer "a lot of value creation" and are "very well-aligned" with the "long-term investing structure" of the 88-year-old firm.
