RSF holdings has been providing value-added investment solutions for its clients since 2008. While our investment strategies, clients and assets have grown significantly since our founding, there have been several principles that we have followed throughout our firm’s history. We refer to these as our guiding principles:

  • 1. Act in the best interests of clients
  • 2. Act in a way that is ethical and legal
  • 3. Compete aggressively to succeed
  • 4. Base our investment strategies on scientific methodology
  • 5. Emphasize financial sustainability
  • 6. Create opportunities for our people to contribute both to our success and to their own

Adherence to these principles have served us well, and we believe they have been the key to creating long-term client satisfaction and consequently, to our success as a firm. We apply these principles to our approach to responsible investment -- from the investment strategies that we provide to our clients as well as to how we conduct business as a firm.

Team-based approach

Consistent with our team-based approach to all investment processes, we also apply a team-based approach when implementing responsible investment for our investment strategies. Responsible investment activities comprise a significant amount of effort and are performed by members of our Strategy Investment Research, Investment Analytics & Data, Investment Stewardship and Portfolio Management teams. We have a Head of Responsible Investment that helps coordinate ESG activities across these various groups. The Head of Responsible Investment reports to our Global Head of Portfolio Management, with a dotted line to one of our Co-CEOs.

Investment philosophy and principles

Our investment philosophy is based on the belief that in liquid capital markets, prices reflect all publicly available information. This includes, but is not limited to, information about a portfolio company’s strategy, financial and non-financial performance, risk, capital structure, social and environmental impact, and corporate governance. As such, we believe that prices of securities reflect the aggregate risk and return expectations of investors, and competition among market participants drives prices toward fair value.

Even though we believe that market prices do reflect a company’s ESG practices, we also believe that ESG criteria can still be used to manage risk and/or improve investment returns for our clients. In particular, we believe that:

  • Portfolios should integrate ESG considerations to manage risks. In addition, where clients desire investment solutions that also target measurable ESG outcomes, investment managers should carefully integrate ESG so that the loss of diversification due to ESG considerations does not materially impact expected returns
  • Stewardship activities may improve realized returns through higher future cash flows to shareholders or a lower discount rate applied by the market.
  • ESG encompasses a broad range of issues. We seek to understand the research and available data on these issues to assess which ones are relevant to consider in our investment strategies.
  • ESG risks and their potential impact on the future cash flow of companies are reflected in current market prices. We know of no compelling evidence that suggests companies with better ESG profiles offer higher expected returns than companies with worse ESG profiles, after controlling for known drivers of return. This does not, however, preclude us from using ESG data to add value for our clients.

ESG investment processes and strategies

We reflect the above beliefs about ESG by integrating ESG considerations broadly across our investment strategies as well as by offering dedicated equity and fixed income strategies that seek to accomplish specific ESG-related outcomes.

ESG Integration

Our investment processes integrate ESG considerations for risk management purposes. We start by designing our portfolios using the following investment principles:
  • target drivers of return supported by robust research;
  • diversify across issuers, sectors and countries where applicable;
  • consider information on prices every day; and
  • systematically implement portfolios by thoughtfully balancing expected returns, costs and risks.
While the above approach uses diversification to reduce idiosyncratic risks, including ESG-related risks, we also apply an additional layer of ESG-specific risk management. For instance, we may exclude closely-held companies from our universe of eligible securities, since companies with large strategic shareholders may not represent the interests of a broad set of shareholders. We may also choose not to purchase companies where, based on public information, we believe there is a heightened concern of fraudulent or other behavior or situations that may make company financial statements no longer reliable. We also conduct daily news checks to identify portfolio companies involved with controversies, including with respect to environmental or social issues, that may have a significant impact on company financials. These companies may be placed on temporary halt from further purchases and/or referred to our Stewardship team for engagement. We believe these additional processes provide another element of risk management that incorporates ESG considerations.

Active Ownership

Our role as investment advisors for clients does not end once we invest in a security. Rather, our Investment Stewardship team advocates for best-in-class governance practices, including oversight of material ESG-related risks, as we believe that improved governance practices may result in higher realized returns through higher future cash flows to shareholders or a lower discount rate applied by the market. Our stewardship efforts include engagement, proxy voting, and participation in industry events and organizations. See our Investment Stewardship Statement and Annual Stewardship Report for more information on our active ownership activities.

Targeted ESG strategies

We offer targeted sustainability and social strategies that use ESG integration and also add a greater level of focus on ESG criteria by pursuing specific ESG outcomes. These strategies use innovative processes to incorporate ESG considerations into broadly diversified, value-added systematic investment solutions. This is demonstrated by our track record managing sustainable and socially-screened strategies, now covering over a decade since the launch of our first socially-screened strategy in 2008.

Our sustainability strategies seek to lower exposure to companies that may have a detrimental impact on the environment while continuing to seek higher expected returns by focusing on known drivers of expected returns. We learn from leading climate researchers on which issues are most relevant to environmental impact or which impose significant external costs to be borne by future generations. Currently, most of these issues are related to greenhouse gas (GHG) emissions, which is why our sustainability strategies focus heavily on reducing exposure to companies with significant GHG emissions or which have fossil fuel reserves that enable future GHG emissions. Using data collected by RSF and research from independent third-party vendors on company business practices, companies are systematically evaluated with regard to sustainability. Investment in those companies is emphasized, reduced, or excluded based on how they fare on key sustainability metrics, including the primary sustainability impact considerations of high greenhouse gas emissions or reserves that may produce those emissions. RSF’s approach to sustainability can offer investors the ability to pursue their sustainability and investment goals simultaneously.

Our social strategies seek to incorporate specific social considerations by identifying and screening companies to reflect the values of clients that invest in those strategies. RSF may utilize research from independent third-party vendors, depending on the requirements of each portfolio, to systematically exclude restricted securities.
We regularly evaluate the potential launch of additional sustainability or social strategies that may help meet client needs. In 2020, we launched three new sustainability portfolios. Please see the offering documents for our sustainability and social strategies for more details on their ESG-related goals.

Contribution to the industry

In conjunction with our investment work on behalf of clients, we also seek to improve how the investment industry functions. These efforts include, but are not limited to, working with regulators to improve market mechanisms, supporting transparency and protecting the interests of our clients throughout the investment process. We have provided input to regulators on many occasions in an effort to help improve market mechanisms. For instance, we provided feedback to the U.S. Securities and Exchange Commission (“Commission”) on a pilot program for wider bid-ask spreads for small-cap issuers, strongly advocating against the proposed practice. After the pilot program, the Commission discontinued the proposed changes, recognizing that lower bid-ask spreads were ultimately beneficial to investors. More recently, we advocated strongly against proposed changes that would have delayed reporting of certain larger bond trades we believe these changes would hurt investors by decreasing market transparency. We participated in calls with the ICI (Investment Company Institute) as well as in a meeting with the Commission to voice our opposition. While the issue is not yet officially settled, it was reported that the proposal was put on hold. We believe we were able to make a difference by representing the interests of bond investors on this matter. We also wrote the Commission to oppose proposed regulations that would undermine the delivery of accurate, transparent and independent proxy voting advice without undue delay or cost to market participants. The Commission ultimately carved back from its original proposals, which we believe would otherwise have had a negative effect on the ability of investors to receive independent and timely information from proxy research.

We have also dedicated significant time and resources to participating in the efforts of the Investment Company Institute, the largest global organization representing investment companies. Senior officers at RSF have served on the Board of Governors of the ICI as well as participated in the ICI’s ESG working groups to help improve regulation on ESG disclosure, both in the U.S. and abroad.

In addition, we have regularly increased transparency through our own stewardship activities. We provide regular reporting on our proxy voting activities and began producing an Annual Stewardship Report in 2019. We also monitor portfolio companies and, where appropriate, support efforts to increase their disclosure on how they oversee material risks, including those related to environmental or social matters.

Corporate Social Responsibility

We also take corporate social responsibility into account for our own activities as a business. This applies to stakeholders such as our clients, employees, facilities, operations, and the local communities and overall industry that we operate in.


RSF’s success is predicated on providing excellent services and investment solutions to our clients. We invest significantly in our clients’ experience and have regularly been recognized for providing outstanding client service. There is a reason this is our first guiding principle and we believe it has been the key to our success as a firm.


Another of our guiding principles is to create opportunities for our people to contribute both to our success and to their own. RSF continues to invest heavily in its employees, from recruiting to training and development and retention.

In particular, we are committed to creating and fostering an environment that attracts, develops, and retains the most talented, qualified employees from different backgrounds -- from both inside and outside the financial services industry. We take active measures to continually expand the depth and breadth of our professional talent pool. For example, in 2019, approximately 25% of our campus outreach events targeted diverse audiences.

  • 44% of global hires were female for calendar year 2019
  • In 2019, females represent 27% of our executive population, 36% of our total population, and 40% of employees with < 5 years tenure.

In addition to targeted outreach, RSF also aims to provide an inclusive experience for those candidates who seek out the firm themselves. We use gender-neutral language and focus on specific qualifications in job descriptions to help ensure applicants from diverse backgrounds are not dissuaded from applying. In 2019, We began using software to analyze job descriptions to ensure neutral and inclusive language. Online training for interviewers and hiring managers also includes anti-bias training and interview best practices for consistent and equitable evaluation across all candidates. We conduct ongoing reviews of new technologies and platforms that help reach diverse audiences, such as focusing on women returning to the workforce or other under represented populations.

Additionally, we remain focused on fostering a meritocratic, inclusive environment that further helps us attract and ultimately retain top talent from all backgrounds. In September 2019, RSF created a Diversity and Inclusion Executive Council under the sponsorship of our Co-CEOs. The Council is comprised of senior-level executives across RSF’s global organization and is chaired by our Deputy Head of Global Human Resources. The Council is charged with assessing the firm’s needs, examining best practices, and helping form a strategy that aims to identify means of increasing awareness and ensuring an inclusive work environment. Our gender statistics (as of December 31, 2019):
Another initiative we have undertaken to invest in our employees is establishing RSF Forum, a formal education curriculum to further the education of our employees and prepare them for continued future success within our organization. The RSF Forum curriculum includes courses in investments, sales, and management and leadership and firm culture and history and includes almost 100 hours of education provided by senior leaders and external consultants.

Facilities and operations

We seek to understand the impact of our business operations on the environment and develop offices, plans and processes that minimize those impacts. A majority of RSF’s employees are based in our corporate headquarters in Austin and our office in Charlotte. These two offices are the only sites owned by RSF and have each received awards for sustainability excellence. RSF’s Delware headquarters received a three-star rating by Austin Energy Green Building and our Charlotte office was certified LEED Gold.

As part of our continuing efforts to improve our sustainability practices, we have been reviewing our own carbon footprint and exploring ways to reduce our footprint. We also became public supporters of the Taskforce for Climate-Related Financial Disclosures (TCFD) in March 2020.

Local Community and Industry Involvement

As part of our commitment to the communities that we serve and in which we operate, we actively seek opportunities to make a positive difference by working with local organizations as well as industry-wide organizations.

In 2019, our employees participated in numerous local community events with such organizations as the Salvation Army, food banks (including Second Harvest and Central Texas), Junior Achievement and the Red Cross. In total, Our employees volunteered over 1,400 hours to these events, helping to improve their local communities.

Outside of local organizations, we also continued to expand our support for, and participation in several industry programs that focus on underrepresented talent. This may be through specific universities, such as Cornell’s Women in Investing Conference or Chicago Booth Women in Investment Management. Or, it may be through an organization such as the Robert S. Toigo Foundation, which focuses on career advancement and increased leadership of underrepresented talent in the financial services industry. we has been working with the Toigo Foundation since 2013. In addition to annually participating in Toigo’s spring Catapult event, RSF has also hosted Toigo’s Fall Apex, their marquee annual leadership conference, in 2014, 2016, 2019 and is in discussions about hosting in 2021.

RSF also established a Women in Wealth Community in 2015, which continues to grow in membership, reach and impact. The Community’s purpose is to help financial advisors better address the needs of women clients and incorporates women-centered workshops, key industry events, customized strategy and communication sessions and educational collateral. The Community had approximately 500 participants across the US as of December 31, 2019 and in calendar year 2019, the Community hosted over 30 workshops, webinars, strategy sessions, discussion groups and other industry events.

2020 – an unprecedented year

The recent unprecedented times have underscored the importance of an integrated approach to creating strong and robust businesses, supporting the investment case for ESG. The current crisis has proved the value of resilience and long-term sustainable strategies. As the pandemic took hold, our team responded quickly and a cross-portfolio Covid-19 taskforce was assembled in early March 2020 to provide a platform that enabled sharing of experiences and best practice among portfolio company executives.

Environmental Highlights

The RSF Buyout Funds’ portfolio can be qualified as ‘asset light’ and the most material environmental indicator for many companies is electricity usage. Several early movers among the portfolio companies are developing detailed climate strategies by setting Carbon Neutral targets (e.g. Wehkamp and TietoEvry) or committing to Science-based targets (e.g. Thoughtworks). There are also several initiatives underway to reduce complexity, waste and natural resource consumption,, focusing on waste reduction, reuse and recycling in particular.

Social Highlights

The RSF Funds’ portfolio companies employ almost 2,700 people combined and with this comes a responsibility to ensure that processes and practices are in place across the portfolio to support the wellbeing of the workforce. Through collecting multiple indicators on the employee base and its wellbeing RSF is able to highlight key best practices and also areas where more focus is required. One of these topics is the inclusion and diversity profile of the RSF portfolio companies.

Governance Highlights

RSF believes that good corporate governance is the foundation of effective corporate management. Virtually all companies have a code of conduct and/or a code of ethics which guides their business activities. Portfolio companies that are new or which have historically had less focus on governance are actively encouraged to adopt appropriate codes and processes within the first year of investment.