ICGN Model Mandate:
The ICGN Model Mandate is designed to align the interests of asset owners and asset managers with a focus on long-term value creation rather than short-term performance metrics.
According to the CFA Institute, the ICGN Model Mandate sets out principles and practices that encourage long-term investment strategies and de-emphasize the significance of short-term performance.
Focus on Long-Term Performance:
The Model Mandate highlights that evaluating investment managers based on short-term performance can lead to suboptimal investment decisions and may encourage behaviors that are not aligned with the long-term interests of asset owners.
The CFA Institute notes that the ICGN Model Mandate promotes a longer-term perspective in investment evaluation, which is crucial for sustainable value creation.
Investment Principles:
The ICGN Model Mandate includes guidelines for performance assessment, stating that short-term underperformance should not be a primary concern if the investment process and long-term strategy are sound.
The Brunel Asset Management Accord echoes this sentiment by emphasizing that short-term performance will be of limited significance in evaluating the manager, aligning with the principles set forth by the ICGN.
Implementation:
Asset owners are encouraged to adopt the ICGN Model Mandate to ensure that their investment mandates and manager evaluations reflect a commitment to long-term performance and sustainable investing.
The CFA Institute suggests that integrating these principles into investment mandates helps mitigate the risks associated with short-termism and supports the alignment of investment strategies with long-term goals.
[References:, CFA Institute, "Environmental, Social, and Governance Issues in Investing: A Guide for Investment Professionals.", ICGN Model Mandate documents, which outline the emphasis on long-term performance over short-term metrics., , , , , ]
