The Rotunda Fund integrates sustainability research with fundamental analysis to select investments that are likely to outperform the market due to the improved long-term financial performance and lower risk features that accompany sustainable practices. Sustainability research provides unique and valuable insights into management and internal operations of an organization. Companies with sound environmental, social and governance (“ESG”) practices have competitive advantages over their peer institutions; these competitive advantages can include lower costs due to efficiency, reduced risk of litigation/environmental liabilities, and lower volatility of raw material costs. Therefore, sustainability practices are expected to yield market-outperforming risk-adjusted returns. The Rotunda Fund integrates sustainability research with fundamental analysis to purchase “best in class” companies at attractive valuations.
The Rotunda Fundund employs a two-step process to select and evaluate opportunities: a threshold step (size and information availability) and an investment evaluation step (ESG, industry, and financial evaluation).
The threshold step requires (i) market capitalization of $500 million and above and (ii) sufficient disclosure of relevant sustainability-related data. It is expected that companies reporting under the Carbon Disclosure Project, or a similar industry-standard report, will fulfill this threshold of required disclosure. Alternatively, companies that publish a corporate sustainability report and/or are required to report data to the US Environmental Protection Agency, such as the chemical and utility industries, will also meet the threshold criteria.
The companies that meet the requirements in the threshold step will then be analyzed in a three-part investment evaluation step. This investment evaluation step seeks companies with:
Best-in-class ESG metrics relative to peer companies and industry best practices.
Industry or industries served, and position within those industries, that is conducive to long-term financial strength.
Superior fundamentals, both qualitative and quantitative/valuation, which indicate the potential for favorable risk-adjusted returns.
Portfolio Managers Bio
Kavi Sud — Senior Portfolio Manager
Before starting his MBA at Darden he worked as consultant with Booz Allen Hamilton in Washington D.C. There Kavi worked in project management capacities for large-scale IT implementations and IT portfolio management. Further, Kavi supported business development through proposal writing and white papers. After his first year at Darden, Kavi worked at JP Morgan's Private Bank in New York City.
Rob Langdon — Portfolio Manager
Rob graduated from the University of North Carolina at Chapel Hill in 2009 with a bachelor of science in business administration and a bachelor of arts in political science. He also completed his master of accounting at UNC's Kenan-Flagler Business School as a Robert G. Sanford PwC Fellow and obtained his North Carolina and New York CPA licenses. Before starting his MBA at Darden, Rob worked in PwC's Banking and Capital Markets Group in New York and Charlotte. During the summer after his first year at Darden, Rob worked in J.P. Morgan's Private Bank in New York.
Charlie Legg — Portfolio Manager
Charlie graduated from Bowdoin College in 2007 where he majored in history and minored in economics. Prior to Darden, Charlie spent four years as an Investment Associate at Putnam Investments, an investment management firm with over $150 billion in AUM. At Putnam, Charlie worked in the fixed income department, focusing on below investment grade corporate bonds and leveraged loans across several industry verticals. After Putnam, Charlie spent two years as an Equity Research Associate at Wolfe Research LLC where he covered airfreight and surface transportation stocks. Following his first year at Darden, Charlie interned at Fortress Investment Group as a part of the Private Equity division in New York City.
Derek Rey — Portfolio Manager
Derek graduated from the University of Southern California in 2006 with a B.A. in Political Science. After graduation, Derek served for seven years as an infantry officer in the United States Marine Corps, leading Marines in operations around the world. Following his first year at Darden, Derek worked as a summer investment banking associate at Barclays.