Former Barclays Plc bankers led by Omar Selim are setting up an asset-management firm focusing on quantitative strategies to find socially responsible investments.
Arabesque Asset Management Ltd. will start in July with two equity funds, said Selim, 49, who left London-based Barclays at the end of May, having held positions including head of global markets for institutional clients for Europe, the Middle East and Africa and chairman of Germany. Quant funds seek to outperform competitors that track indexes by using mathematical algorithms and computers to find investments.
Based in London, the firm is seeking to tap demand for investments in companies promoting the improvement of the environment, consumer protection and human rights. Socially responsible investors typically avoid alcohol, tobacco, gambling, pornography and weapons industries. At least $13.6 trillion, or 22 percent of global assets, are allocated for such strategies, the Global Sustainable Investment Alliance said in January.
The MSCI World Socially Responsible Index generated a 7.9 percent return this year, while the MSCI World Index earned 6.3 percent.
The Arabesque Global Top 1,000 will be made up of 1,000 stocks, weighted by market capitalization. The Arabesque Systematic Global Equity Fund is based on the same stocks and allows for varying degrees of risk, Selim said.
Arabesque has a research and advisory office in Frankfurt and plans another in the Middle East for Islamic-compliant investors, Selim said. The project was initiated by Barclays two years ago, before Arabesque founders bought it from the bank in May, he said.