Brown Advisory, a global and independent investment management firm with $131.1bn in client assets, has launched its US Sustainable Value Fund under its Dublin UCITS umbrella.

The Fund is governed by Article 8 of the Sustainable Finance Disclosure Regulation (SFDR). This follows a successful US mutual fund launch in February for the US Large-Cap Sustainable Value Strategy, managed by Michael Poggi.

Brown Advisory said it believes that the vacuum of strategies at the intersection of sustainability and value has created an unmet market need: ESG research has historically avoided "value stocks" due to their exposure to complex industries.

It said its research process makes sense of these complexities by identifying companies traditionally perceived as being ‘value stocks' where investors can also benefit from a compelling sustainability journey. 

The Fund invests in a concentrated portfolio of companies that have durable fundamental strengths, exhibit capital discipline, with attractive valuations and that also benefit from sustainable competitive advantages.

Referred to internally as Sustainable Cash Flow Advantages (SCFA), the manager believes strong ESG execution often extends the duration and lowers the volatility of cash flows.

SCFA is identified through the use of a ‘3P' investment filter, which focuses on how companies manage their People, Process and Product. The Fund aims to achieve competitive risk-adjusted returns while providing a margin of safety over a full market cycle.

The US Sustainable Value Fund is naturally built on Brown Advisory's long history of expertise in US large-cap, value-focused and sustainable investing, and will join a suite of sustainable investment strategies, including the Large Cap Sustainable Growth Fund, Global Leaders Sustainable Fund and Global Sustainable Total Return Bond Fund.

Logie Fitzwilliams, head of international business and global head of sales at Brown Advisory, said: "Brown Advisory's fund offerings continually evolve to meet client demand. Our clients expressed a need for more sustainable large-cap value exposure in their portfolios, and we're eager to provide them with access to a strategy that embodies Brown Advisory's proprietary fundamental and ESG research capabilities in a market with limited offerings within this space." 

The Fund is managed by Michael Poggi, who joined Brown Advisory as an equity analyst in 2003 and has since covered a wide range of sectors with a primary focus on value investment opportunities.

He will be supported by a large and diverse team of sector specialists and ESG experts including Director of Equity ESG Research and Strategy, Katherine Kroll.

Michael Poggi, portfolio manager, said: "The U.S. Sustainable Value Fund is compelling because it combines Brown Advisory's expertise in ESG research with our years of experience in U.S. large-cap and value investing.

"We believe that this approach enables us to uncover undervalued companies that others may overlook. By integrating our fundamental research with an ESG lens and using our extensive and diverse team of analysts, the strategy has the potential to deliver attractive returns for our investors."

Katherine Kroll, director of equity ESG research and strategy, said: "When assessing a company through an ESG lens, we seek to understand both its management of risks and its ability to execute on sustainable opportunities.

"Our Sustainable Investing philosophy is centred on a holistic view of a company, where we consider how ESG characteristics intersect with strong fundamentals to provide a competitively differentiated opportunity for investors."

Brown Advisory considers that this Fund actively promotes, amongst other characteristics, social and/or environmental characteristics and therefore is governed by Article 8 of the Sustainable Finance Disclosure Regulation (SFDR).

The Strategy launched initially with a Mutual Fund in March 2023, followed by the [Dublin] UCITS Fund.

The strategy is also available to investors globally as a separately managed account.