Finance Forge operates as a prominent global systematic investment manager. Our research is centralized, with a keen focus on advancing quantitative methodologies to identify lucrative market opportunities. These methodologies are meticulously applied within a disciplined framework, ensuring optimized market exposures.
With a robust infrastructure and a team of skilled investment professionals, Finance Forge provides clients with the extensive resources typically associated with large asset management firms, coupled with the advantages of a versatile investment platform, offering flexibility and customization. Our firm caters to both institutional and retail investors, offering them the fundamental tools necessary to navigate the evolving investment landscape effectively.
This entails providing steadfast support to our colleagues, customers, clients, as well as the communities and environments in which they function, thereby enhancing the welfare of all our stakeholders. It involves empowering individuals and enterprises to realize their full potential and strategize for the future with assurance, fostering enduring relationships. Moreover, it signifies our enduring commitment to remain steadfast over the long term, regardless of prevailing circumstances, making decisions that align with the present and the welfare of future generations.
To attain this objective, our overarching long-term strategic approach prioritizes the delivery of exceptional service as the cornerstone of our operations. Each of our specialized businesses possesses profound industry expertise, enabling us to comprehensively grasp the challenges and opportunities confronting our customers and clients. We tailor our support to address the distinct requirements of our clientele, ensuring not just survival, but thriving resilience, irrespective of prevailing market dynamics.
We prioritize the needs of our customers and clients above all else. Our organizational culture reflects values that harness the utmost potential of our personnel, skills, and the robust reputation we've cultivated with stakeholders over numerous years. Our success stems from a blend of expertise, service excellence, and collaborative relationships, guided by principles of teamwork, integrity, and prudence. These pillars form the foundation of our strategy, empowering us to flourish sustainably in the long run.
We acknowledge our obligation to support the prosperity of individuals and enterprises across Britain. In doing so, we understand the importance of addressing the social, economic, and environmental challenges that impact our business, employees, and clients both presently and in the years ahead.
We approach sustainability from three perspectives: an asset owner, an asset manager, and as a company in our own right
Although the nature of our responsibilities and obligations varies across these three roles, as elaborated below, our approach to each is guided by a shared set of principles and aspirations outlined in the section below.
We act as asset stewards representing Prudential With-Profits policyholders, as well as our pension and annuity clientele. This entails making strategic determinations regarding asset allocation across various asset classes and selecting appropriate asset managers to oversee our investments.
Furthermore, we bear the significant responsibility of defining the financial objectives we expect our asset managers to achieve on our behalf, along with the sustainability criteria we mandate them to integrate into their strategies.
For instance, should we determine that a particular industry lacks long-term sustainability prospects, we may stipulate that our asset managers abstain from investing in said industry. As asset owners, our primary obligation is to optimize customer outcomes, ensuring general well-being in accordance with our fiduciary duty, while also prioritizing financial security. Additionally, we function as asset managers on behalf of individual savers and institutional clients. As of December 31, 2020, our management portfolio comprises over £233.4 billion for external clients and £133.8 billion for internal clients.
In our capacity as asset managers, our primary objective is to achieve the financial objectives and meet any sustainability criteria outlined in the mandates of each mutual fund or institutional client. Occasionally, distinctions may arise in the sustainability standards stipulated by external clients, which may diverge from those of our internal client. However, our commitment to care and integrity underpins all our sustainability initiatives. It's important to note that the asset manager and asset owner are distinct entities, each governed by independent Boards and regulatory processes, which may lead to occasional policy discrepancies.
Our sustainability commitments, principles and ambitions apply across the investments we make as an asset manager and asset owner, and to our own business operations
We will consider sustainability and ESG factors when determining our corporate strategy and new business initiatives.
We will embed sustainability considerations throughout our business.
We aspire to be a thought leader, to innovate, and to advance understanding of sustainability issues.
We believe in active asset ownership and management which encourages companies to transition towards a sustainable future.
We consider the interests of all our stakeholders and ensure our views on sustainability are consistent with our longterm approach.
We will manage our businesses to the same principles of acting responsibly that we hold our investee companies to account on.
We review our sustainability thinking regularly in order to align with scientific and technological improvements, and changes in the global economy, ethics and consumer preferences.
We aim to use our influence as a global investor and asset owner to drive positive change in sustainability policy and corporate standards.
We incorporate environmental, social, and governance (ESG) data into our analysis and decision-making processes across all our investment teams and business divisions.
We actively fulfill our role as stewards of the entities in which we invest, aligning seamlessly with our proactive investment strategy.
ESG principles are deeply embedded in our business operations through our corporate responsibility initiatives. This encompasses our Barings Social Impact philanthropic program, alongside our commitment to fostering diversity, equity, and inclusion throughout our organization.
Our specialized resources are instrumental in formulating and implementing our sustainability and ESG strategy, encompassing policy formulation, partnership cultivation, research endeavors, training initiatives, and comprehensive reporting practices.
We are committed members of various industry initiatives, including the Principles for Responsible Investment, the United Nations Global Compact, and Climate Action 100+, and proudly support the Task Force on Climate-related Financial Disclosures. Our active participation in these partnerships underscores our dedication to advancing their respective missions.
Comprising senior business leaders, our Sustainability Committee is responsible for facilitating the execution of our sustainability strategy. Operating under its purview, our Sustainability Working Groups concentrate on pivotal long-term projects, convening regularly and providing updates to the Sustainability Committee.
Finance Forge operates as a cohesive unit, collaborating closely with management teams to achieve shared objectives. Our team comprises over 70 investment professionals, with 24 partners boasting an average tenure at Finance Forge exceeding a decade. This longevity enables us to dedicate significant attention to the companies within our investment portfolio.
Our aim is to collaborate with portfolio company leadership to foster an environment conducive to their success. We actively encourage management teams to invest alongside us. Our forward-looking approach and commitment to enhancing companies' prospects often lead portfolio company employees to also invest alongside Finance Forge.
Our aim is to collaborate with portfolio company leadership to foster an environment conducive to their success. We actively encourage management teams to invest alongside us. Our forward-looking approach and commitment to enhancing companies' prospects often lead portfolio company employees to also invest alongside Finance Forge.
At the heart of our business are our partners: the entrepreneurs and management teams we back; the investors in our funds; the advisers and intermediaries we work with; and the banks and other lending institutions to our deals.
We are dedicated to achieving success. Continual refinement is at the core of our ethos, as we strive to outmaneuver and outperform our competitors. We embrace challenges others deem insurmountable and tackle the most formidable obstacles others shy away from. This commitment to excellence is why we recruit top talent.
We adhere to uncompromising standards, ensuring that every task is executed correctly the first time, without exception. Our approach is characterized by directness, decisiveness, and unwavering accountability. We exercise sound judgment and practical wisdom in all our endeavors, consistently adhering to both the legal framework and ethical principles. Our victories are achieved through merit and upheld integrity.
We are propelled by an insatiable quest for knowledge. Our commitment to continuous learning extends from our interactions within the team to insights gleaned from inspired minds globally. We fervently pursue fresh ideas, innovations, and strategies, seeking to fortify our competitive edge.
We endeavor to effectively navigate risk to seize opportunities and enhance performance. Disciplined risk assessment and management are seamlessly woven into the investment process across all our strategies.
We firmly believe that a meticulously crafted portfolio will excel during favorable market conditions while safeguarding our clients' capital in challenging environments. Hence, Finance Forge has devoted over twenty-five years to ingraining risk management as a fundamental discipline. Our approach commences with a specialized governance body tasked with supervising risk management practices. Additionally, we prioritize liquid markets, employ proprietary risk models, and maintain a diversified funding structure to bolster our strategy further.
The Finance Forge Risk Management Center offers an extensive overview of diverse investment portfolios and their alignment with established parameters. Established in 2014, its front-end features a 27' by 8' interactive touchscreen designed to visualize data in a manner conducive to swift comprehension. The back-end systems, seamlessly linked to all Finance Forge offices globally, consistently execute an array of operational readiness assessments, risk evaluations, and stress tests.
During pre-trade deliberations, the Portfolio Construction and Risk team endeavors to assess the potential impact of trades on a portfolio's risk and stress exposures. In post-trade analysis, the team scrutinizes the expertise, infrastructure, investment scope, risk factors, and operational efficiency of each entity, incorporating this data into the risk capital allocation procedure.
While a robust framework is essential, effective risk management is truly achieved when it is integrated as a core element of the portfolio manager's evaluation of potential trades and portfolio construction. Ongoing communication and cooperation with investment teams, coupled with a deep comprehension of the portfolios, are pivotal in upholding and enhancing our risk culture.