SMDAM said it has partnered with global alternative investment manager Ares Management Corporation, which will be managing the portfolio. 

Building on the existing Global High Yield strategy, first introduced in 2012, the fund aims to maximise performance while applying exclusions on certain ESG characteristics and engaging with portfolio companies on sustainability topics.

The partnership between the two investment firms came about as Sumitomo Mitsui Financial Group, the Japanese parent company of SMDAM, acquired a minority stake in Ares in 2020, the firm continued.

“High yield ESG bond investing has gained more recognition over the past few years, and we believe this strategy reaffirms our commitment to sustainable business practices. We will look to invest in ESG-responsible sectors and leverage our relationships with portfolio companies to engage with issuers and management teams on ESG topics,” Christopher Mathewson, managing director and portfolio manager in the Ares Credit Group, said.

SMDAM has been managing Japan equity mandates since its establishment in 1973. Since then, the firm has diversified its product offering, working across a broad range of asset classes including Japan equity and fixed income, Asian equity, global equity and managing $127 billion. Sumitomo Mitsui DS Asset Management Company is based in Tokyo, and operates a number of businesses in London, New York, Hong Kong, Shanghai and Singapore.