Environmental, Social and Governance
Environmental, Social and Governance issues have a greater bearing on the long-term outcome than they do over the next 6-12 months, the typical investor time-frame. Marathon investors aim to consider all material issues and weigh them against what is reflected in the current market price of a stock. It is important to note that portfolio managers integrate assessment of ESG within their overall analysis of stocks, rather than treating it as a stand-alone issue in making investment decisions. These decisions are not influenced by a top-down investment committee, an in-house ‘responsible investing/proxy voting team’, or a marketing department – as none of these exist at Marathon. A company with ESG concerns could still be an attractive investment, if the issues are outweighed by other considerations, including valuation.
For further information on Marathon's approach to ESG please click here to view Marathon's ESG Policy.
Engagement, Activism and Voting
Marathon's primary focus is finding companies that it believes are able to generate good returns over time, but the firm also has a strong track record of engagement with company management, to encourage long-term value creation. Portfolio managers feel this is more effective than an activist approach of taking outsize bets with clients’ assets and then publicly criticising companies, in an effort to force short-term changes upon them. Initially, Marathon’s preference is to engage privately with company management, to better understand strategic plans and capital allocation; but if necessary, the firm will consider escalating engagement and stewardship activities. Portfolio managers have always voted their own proxies at Marathon, as we consider the ability to influence management to be an integral part of the investment management function.
For further details about Marathon’s proxy voting activity and policy click here.
UK Stewardship Code
The UK Stewardship Code (first published in July 2010, revised in September 2012 and again in 2020), aims to enhance the quality of engagement between asset managers and companies to help improve long-term risk-adjusted returns to shareholders. The Code sets out a number of areas of good practice to which the UK Financial Reporting Council (FRC) believes institutional investors should aspire. It also describes steps asset owners can take to protect and enhance the value that accrues to the ultimate beneficiary. Existing signatories to the Code will need to submit a Stewardship Report that meets the FRC’s reporting expectations in the 2020 Code.
To view Marathon’s UK Stewardship Code statement click here.
Japanese Stewardship Code
The Council of Experts Concerning the Japanese Version of the Stewardship Code published the Principles for Institutional Investors (Japan’s Stewardship Code) in February 2014, with a further revision published in 2017. The objective is to help investee companies look to generate long-term growth through engagement and other stewardship activities in accordance with the underlying principles, thereby enabling institutional investors to maximise long-term returns for clients. To fulfil this objective institutional investors must conduct appropriate stewardship activities, which in turn must sufficiently influence their investee companies’ management.
To view Marathon’s Japanese Stewardship Code statement click here.
Conflicts of Interest
Marathon may encounter conflicts of interest in respect of fulfilling its stewardship responsibilities. In all such situations Marathon’s policy is to look to manage such conflicts in a manner that does not compromise or prejudice the best interests of our clients.
To view Marathon’s Conflicts of Interest policy click here.
Shareholder Rights Directive II ("SRD II")
Effective stewardship and shareholder engagement is reflected in Marathon’s thoughtful and patient investment philosophy. Our investment approach and engagement policy are inextricably linked to work over the longer term to carefully select and manage company investments on behalf our clients. This style is supportive of wider industry and regulatory initiatives, both to increase transparency and promote good stewardship objectives; thus ensuring our ongoing compliance with requirements such as Shareholder Rights Directive (“SRD II”). Please click here for full details of our Corporate engagement policy, and how this forms part of Marathon’s long-term investment strategy.