Northern Trust has partnered with the Asset Management Exchange (AMX) and German asset manager DWS to enable pension funds to express stewardship voting preferences in pooled funds.
The new ‘Investor Stewardship Service’ will allow companies from across the world to receive proxy votes from the AMX DWS pooled funds, aligned with investor preferences where possible on key topics such as climate change, executive compensation and board diversity.
The service intends to overcome challenges for pension funds that have historically relied on their investment manager to execute a voting policy for the pooled fund.
“This is another step on our journey at AMX to provide institutional investors with best-in-class fund structures which disrupt the traditional and outdated ways of doing business,” said Christopher Head, head of business development, AMX.
“It is a paradigm shift which will begin the transition of voting power from investment managers to the rightful institutional asset owners and will increase the speed by which important climate change and governance issues are addressed by corporate stewards across the globe.”
The launch of the new service follows the UK Government announcing in December 2020 the establishment of the Taskforce on Pension Scheme Voting Implementation to encourage industry solutions linking investor preferences to corporate voting actions.
As part of the partnership, Northern Trust will use its expertise in asset servicing and corporate actions to develop and rollout the solution.
“Northern Trust is delighted to support AMX and its clients in the creation of its investor stewardship offering,” said Clive Bellows, head of global fund services, EMEA, Northern Trust.
“By combining our tax transparent fund expertise with experience of delivering asset servicing solutions to support corporate governance alongside our strategic voting partner Broadridge Financial Solutions, we aim to help significantly amplify investors’ voices. This innovative solution is a key step in fostering greater shareholder engagement and ethical investment for institutional investors.”
Launched in 2017, AMX negotiates with fund managers, transitions assets, provides reporting and adds an extra layer of oversight. It also aims to secure better pricing because of the buying power of the exchange by centralising operating costs, such as custody and administration at the exchange, thereby lowering operating expenses.