Author: Tumelo – www.tumelo.com
We’re delighted to share that Tumelo will be powering Legal & General Investment Management’s (LGIM) pass-through voting offering across its pooled-equity funds.
The £2bn Camden Pension Fund is the first to leverage this opportunity by applying its bespoke policy with PIRC, aligning its voting across both its segregated mandate and pooled-fund investments so as to have a singular voice in the market.
Using Tumelo’s voting technology, clients of LGIM can now choose to:
- Vote with LGIM’s stewardship team.
- Vote with a third-party template policy or custom policy.
- Over-ride either the fund manager’s vote, the third-party policy recommendation, or the custom policy.
This is an exciting development for the global market’s adoption of client-directed voting services; as the first major UK-based manager to offer pass-through voting, LGIM joins the likes of BlackRock, Vanguard and State Street in supporting greater empowerment of their clients.
We invite you to read our case study on the partnership to learn more about this new development.
About pass-through voting
Since regulation has forced better vote reporting, Institutional asset owners have noticed inconsistent voting patterns across the portfolio of pooled funds that they manage. This is typically in the range of 30% misalignment, causing a potential fiduciary duty issue for the asset owner.
In addition, regulation in the UK and the rising politicisation of investing/voting in the US (the INDEX act and others) is forcing fund managers to consider passing the vote down to their clients.
Historically, clients would have solved this problem by setting up a segregated account, therefore owning the assets in the fund themselves.
However, this comes with additional expenses such as custody and trading fees and mostly isn’t available to anyone with less than $1 billion in assets.
Using pass-through voting, asset managers can now offer their clients a product with the benefits of cost and liquidity traditionally offered by a pooled fund alongside the ability to vote their shares on a pro-rate basis.
You can download Tumelo’s white paper here to learn more about the market developments, legal implications, and various benefits of pass-through voting.