Decoding Article 9 funds with La Financière Responsable’s Alberto Matellán

La Financière Responsable (LFR) has a product offering consistent with its name. The French asset manager offers a suite of Article 9 funds. LFR is majority owned by MAPFRE, a Spanish insurance group with €50bn under management.

To be classified under Article 9 of the EU’s Sustainable Finance Disclosure Regulation (SFDR), sustainability must be part of the fund’s objectives. Compared to Article 8 where sustainability is promoted or Article 6 where these aims are less explicit.

Alberto Matellán, LFR’s general manager, spoke to Net Zero Investor about LFR’s Article 9 funds, their performance outlook and the macroeconomic risks that Matellán expects these funds to successfully navigate.

The process

LFR’s fund range, with a heavy European equity tilt, is backed by the company’s distinct investment process.

For one, the company maintains a proprietary database of sustainability-related information. Secondly, that information feeds into directly into investment decisions.

“We’ve developed what we call the ‘eco-social footprint’, which integrates sustainability data into financial analysis” says Matellán.

In addition, LFR does not differentiate between sustainability and investment teams. “The same team performs both the financial and sustainability work; we don’t split them”, he adds.

A direct consequence of that internal architecture is an institutional embrace of Article 9. “All of our funds are Article 9 under SFDR”, notes Matellán.

“We currently manage four: one impact fund (the 85-15, the French version of an impact fund), a general sustainable fund, an inclusive fund focused on disability, and some mixed funds in collaboration with MAPFRE, including Capital Responsible”, he explains.

Alignment by label

For LFR, the choice to offer labelled funds is a deliberate one. Matellán is convinced the Article 9 label as well as French sustainability labels held by LFR funds signal asset manager alignment.

“First, they provide external validation to clients that we do what we say. Second, they give our teams a clear, structured process. Third, they align our sustainability targets with client expectations”, says Matellán.

Performance

Alignment aside, investors in these funds are closely tracking their performance. Matellán says this is where things are less straightforward than they might seem.

“On performance, there isn’t a universal, direct link between sustainability and returns. Some argue sustainable strategies always outperform; others say they underperform due to higher costs”, he points out.

The variation in Article 9 fund performance, Matellán says, comes down to how the investment strategy is implemented.

“Our funds are equity-only, Europe-focused, and built on the thesis that when strategy and sustainability are aligned, you get stronger, more profitable companies over the long term. We invest in a specific selection of solid companies, and we don’t expect to move in lockstep with indices, but our return expectations are positive”, he says.

To explain further Matellán points to an example of listed renewable energy companies.

“For listed renewables, the picture is mixed. Doubts have persisted for a couple of years due to regulatory swings in some countries — Spain, for example — and debates over technology costs and efficiency”, Matellán says. “These issues create headwinds for listed renewable energy companies even in an otherwise optimistic market”, he adds.

Navigating risks

As is the case with the wider market, LFR’s funds are navigating macroeconomic risks – inflation being key amongst them.

“On inflation, it’s still not low enough to be comfortable. US inflation is roughly 2.7–3%, Europe around 2.1%, which is near the ECB’s target. But future inflation is uncertain”, Matellán explained.

Add to that heightened tariffs or widening fiscal deficits and the prospect of gusty headwinds becomes harder to ignore. Yet, Matellán expects LFR’s sustainability-driven investment hypothesis to make it through the storm.

“Our philosophy ensures that alignment, which is why we believe our Article 9 funds can withstand the macroeconomic risks we’ve discussed”, Matellán affirms.

It all comes down to a fundamental belief that LFR nurtures – that financial performance and sustainability are aligned. That alignment is not only a defining characteristic of LFR’s thought process behind its Article 9 funds but also feeds into Matellán optimism in their long-term resilience.