Triodos’ investments are based on key sustainability themes such as energy and climate or food and agriculture. They combine high sustainable impact, and aim to offer reasonable financial returns. Clients of Triodos Private Banking in the Netherlands access these investments via asset management (59%, 2014: 60%), advice (9%, 2014: 8%) and execution only (32%, 2014: 32%).
Triodos Bank Private Banking
in EUR million
A slight decline in investment advice is in line with expectations following the introduction of a new transparent pricing structure for advice at the end of 2013. Clients pay Triodos Private Banking for advice directly as an alternative to ‘hidden’ investment holdings charges. This development prompted a limited number of clients to switch to other services during 2014 and 2015.
A third of entrusted funds within Private Banking are invested in sustainable investment funds, Triodos Bank depository receipts or Triodos Bank savings products. Private Banking informs clients about fund specifications, shares the sustainable impact of a client’s investment and facilitates their transactions.
Total assets for Private Banking in Belgium grew to EUR 705 million, consisting of EUR 439 million in relationship management and EUR 266 million in asset management.
During the year the department continued to improve its internal administration benefiting customers with, for example, meeting new regulatory requirements. In addition, Private Banking collaborated on the development of new investment circles connecting social entrepreneurs with Private Banking clients. This work will be piloted during 2016.
Overall Triodos Private Banking grew its entrusted funds in the Netherlands by EUR 95 million to EUR 1,115 million, a growth of 9%, compared to EUR 100 million (10%) in 2014.
In The Netherlands, growth again came predominantly from private individuals. Foundations and religious organisations continued to be reluctant to commit capital. Triodos Private Banking researched why during the year. Triodos Bank clients point toward a desire for more flexibility in channeling investments towards causes that they find important. Recent external research also shows that only a minority of potential clients consider sustainable issues when making investment decisions. A majority of foundations and religious organisations apparently still avoid sustainable investments although these fit very well with their social and environment goals. As a response, Triodos Private Banking will increase its efforts to communicate the benefits of sustainable investing to these organisations.
2015 was again a positive year for investments, but this only applied to the alternatives and equities. Interest rates for ordinary savings remained extremely low, while bonds delivered no yield.
Defensive portfolios with approximately 25% equities yielded 3.3% (2014: 9.0%), while neutral portfolios with approximately 50% in equities showed 6.5% returns (2014: 11.8%). Triodos’ sustainable equity portfolios outperformed the overall MSCI index by 3.1% to yield 12.4%. Since 2006, when Triodos MeesPierson started its operations, Triodos Private Banking has outperformed this index by more than 20%.
Performance Triodos Equity portfolio versus MSCI
Start = 100 at inception Private Banking in September 2005
Triodos Private Banking’s third investment class of alternatives – or mission related investments – which are only available in The Netherlands, returned 5.1%, compared to 4.5% in 2014.