Wermuth Asset Management

Investor in funds Private debtPrivate equityPublic equityReal assets

User Profile

Wermuth Asset Management GmbH (“WAM”) is a German family office and BaFin-regulated investment adviser.

WAM proves through high risk-adjusted total returns that a positive environmental, social and governance impact can be synergetic with strong performance. Attracting capital through performance, WAM contributes to the move of trillions of euros into resource-efficient companies and renewable power needed to stop climate change. WAM has a team with substantial experience working and investing in Western Europe and emerging markets. The firm allocates its own money alongside that of other investors and aims to generate alpha and significant real returns over the medium term. It strives to generate significant returns and have a positive impact on the world. WAM aims to adhere to high ethical standards and support sustainable business practices, aligning its interests with those of its investors by co-investing in all of the strategies.

WAM was founded in 1999, and has since then launched and advised several funds and managed accounts in alternative asset classes such as private equity, long/short equity, activist value investing, utilities, real estate and forestry assets, valued at peak in excess of $1bn. WAM’s current investment strategies include two private equity funds focused in resource and energy efficiency (Green Gateway Fund and Green Gateway Fund II), three listed strategies (Wermuth Europe Income Strategy, Wermuth Global Crash Insurance, and Wermuth Eastern Europe Long/Short Strategy), and real estate development strategies. These strategies, which all aim to achieve clean energy and resource efficiency, include: helping resource efficient growth companies grow in emerging markets, investing in listed electric power and distribution companies and assume board positions to lobby for greater efficiency and reforms and the company and government levels, investing in real estate to improve questions of energy supply for heating and cooling, waste water, energy efficient building materials, etc. The WAM investment teams are based in Berlin, Mainz, Amsterdam and Moscow.

WAM is also a member of the Green Growth Action Alliance, led by the World Economic Forum, which supports the scale-up in green growth by working with governments to help them adopt a systematic approach that rewards innovative green sectors through sound policies and improves their access to finance.

IRIS Use

For the Green Gateway Fund (GGF) advised by WAM, the following metrics are being tracked: Greenhouse Gas Reductions due to Products Sold (PI5376), Wastewater Treated Capacity of Products Sold (PD3523), and Hazardous Waste Avoided (PI2073). Greenhouse gas reduction is calculated on quarterly basis and included in a quarterly report. The other two metrics will be included in an annual report.

Other Impact Measurement Tools

Impact measurement is embedded in all parts of the investment process for WAM. In WAM’s private equity investments, Environmental, Social and Governance (ESG) questions are first incorporated in the due diligence questionnaire. These ESG questions reference the Sustainable Development Key Performance Indicators, which will be monitored and reported to investors. To measure the performance of the portfolio companies, Sustainable Development Key Performance Indicators (SD-KPIs) will be implemented and monitored. All portfolio companies will have an environmental policy and management system in place. Metrics will be defined for each portfolio company individually, as they will vary by company and by market. In addition to the IRIS standard, WAM will rely on the SD-KPI Standard 2010 – 2015, which is included here.

These metrics will include quantitative data points capturing information such as:

  • Energy/Greenhouse gas efficiency of production / products – direct and indirect CO2-equivalent emissions.
  • Energy mix, Proportion of and access to renewable / sustainable energy
  • Water consumption & efficiency, water quality and management of waste water
  • Emissions of hazardous/toxic materials and non-hazardous waste
  • Proportion of recycled / sustainable (FSC) raw material input.
  • Proportion of products with “Design for Environment” / Eco-Label
  • Prevention of marine pollution and accidents.
  • Access to water and sanitation services in developing countries
  • In addition to the above, the metrics will also capture more operational and risk-management measures regarding issues such as human rights, labor, and anti-corruption principles:

    • Certifications
    • Environmental Litigations
    • Health safety and Employee Welfare
    • Training
    • Equality at work
    • Litigation on Social issues
    • In addition, WAM will track whether the portfolio company has prepared the ESG data in the reporting period or whether the company is directly in contact with a corruption sensitive country.

      The relevant metrics will be selected by the Investment Manager, supported by the ESG Officer based on sector and region specific needs. WAM’s dedicated ESG Officer and Reporting Manager will report progress on the metrics to the investors on an annual basis. Furthermore, all investment professionals will continuously manage to show good results on the performance of their portfolio companies on ESG issues. The respective risk management performance includes related sustainable remuneration and bonus systems on the portfolio company and GP level. The ESG information will be incorporated in a section in the financial reports. It is a precondition for any new investment that each new portfolio company establish an ESG policy (should one not already exist), and complete an ESG assessment within a year. The ESG Officer receives ESG training on a yearly basis according to new trends on the ESG measurement market. All the other investment professionals will receive introductory ESG training in order to ensure the assessment is carried out appropriately.