Omar Selim: Building a Values-Based Asset Management Firm (A)

George  Serafeim; Rebecca   Henderson; Shannon  Gombos

Case | HBS Case Collection | January 2015 (Revised September 2017)

Omar Selim: Building a Values-Based Asset Management Firm (A)

by George Serafeim, Rebecca Henderson and Shannon Gombos

Abstract

The sustainable investing market was a recent phenomenon in the first decade of the 21st century. However, an increasing number of investors began to integrated Environmental, Social and Governance (ESG) issues in investment decisions. At Barclays Capital, Omar Selim had spearheaded the development of Arabesque—a new socially responsible investment firm designed to appeal to all investors wishing to invest according to broadly held environmental and social values, such as limiting environmental externalities and promoting workforce diversity, as well as to investors wishing to align their investments with their faith. Should Selim give up a very successful career to compete in a highly competitive business, in which it could be very hard to build a differentiated offering? Could Arabesque be something different in the world of asset management? And what role, if any, should values and religious faith play in shaping the firm's products and conduct?

Keywords: sustainability; ESG; social business; entrepreneurs; scaling; emerging market entrepreneurship; not for profit; entrepreneurial finance; mentoring; business networks; hybrid nonprofit funding; Investing; investment management; Asset Management; Values and Beliefs; Religion; Personal Development and Career; Business Startups; Social Enterprise; Social Entrepreneurship;

Language: English

Format: Print

17 pages

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Citation:

Serafeim, George, Rebecca Henderson, and Shannon Gombos. "Omar Selim: Building a Values-Based Asset Management Firm (A)." Harvard Business School Case 115-021, January 2015. (Revised September 2017.)

Related Work

Case | HBS Case Collection | January 2015 (Revised September 2017)

Omar Selim: Building a Values-Based Asset Management Firm (A)

George Serafeim, Rebecca Henderson, Shannon Gombos, George Serafeim, Rebecca Henderson and Shannon Gombos

The sustainable investing market was a recent phenomenon in the first decade of the 21st century. However, an increasing number of investors began to integrated Environmental, Social and Governance (ESG) issues in investment decisions. At Barclays Capital, Omar Selim had spearheaded the development of Arabesque—a new socially responsible investment firm designed to appeal to all investors wishing to invest according to broadly held environmental and social values, such as limiting environmental externalities and promoting workforce diversity, as well as to investors wishing to align their investments with their faith. Should Selim give up a very successful career to compete in a highly competitive business, in which it could be very hard to build a differentiated offering? Could Arabesque be something different in the world of asset management? And what role, if any, should values and religious faith play in shaping the firm's products and conduct?

Keywords: sustainability; ESG; social business; entrepreneurs; scaling; emerging market entrepreneurship; not for profit; entrepreneurial finance; mentoring; business networks; hybrid nonprofit funding; Investing; investment management; Asset Management; Values and Beliefs; Religion; Personal Development and Career; Business Startups; Social Enterprise; Social Entrepreneurship;

Citation:
Serafeim, George, Rebecca Henderson, and Shannon Gombos. "Omar Selim: Building a Values-Based Asset Management Firm (A)." Harvard Business School Case 115-021, January 2015. (Revised September 2017.) View Details

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Supplement | HBS Case Collection | February 2015 (Revised September 2017)

Omar Selim: Building a Values-Based Asset Management Firm (B)

George Serafeim, Rebecca Henderson and Shannon Gombos

The case describes the decision of Omar Selim to set up Arabesque as an independent organization and how he organized Arabesque to use both financial and environmental, social and governance (ESG) data in order to deliver performance for its clients.

Keywords: social enterprise; social entrepreneurship; Investing; investment management; ESG; sustainability; investment banking; leadership; Leadership & Corporate Accountability; Leadership Style; Business Model; Asset Management; Business Startups; Social Enterprise;

Citation:
Serafeim, George, Rebecca Henderson, and Shannon Gombos. "Omar Selim: Building a Values-Based Asset Management Firm (B)." Harvard Business School Supplement 115-035, February 2015. (Revised September 2017.) View Details

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Teaching Note | HBS Case Collection | January 2017 (Revised February 2017)

Omar Selim: Building a Values-Based Asset Management Firm (A) and (B)

George Serafeim and David Freiberg

Citation:
Serafeim, George, and David Freiberg. "Omar Selim: Building a Values-Based Asset Management Firm (A) and (B)." Harvard Business School Teaching Note 117-011, January 2017. (Revised February 2017.) View Details

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Case | HBS Case Collection | January 2015 (Revised September 2017)

Omar Selim: Building a Values-Based Asset Management Firm (A)

George Serafeim, Rebecca Henderson, Shannon Gombos, George Serafeim, Rebecca Henderson and Shannon Gombos

The sustainable investing market was a recent phenomenon in the first decade of the 21st century. However, an increasing number of investors began to integrated Environmental, Social and Governance (ESG) issues in investment decisions. At Barclays Capital, Omar Selim had spearheaded the development of Arabesque—a new socially responsible investment firm designed to appeal to all investors wishing to invest according to broadly held environmental and social values, such as limiting environmental externalities and promoting workforce diversity, as well as to investors wishing to align their investments with their faith. Should Selim give up a very successful career to compete in a highly competitive business, in which it could be very hard to build a differentiated offering? Could Arabesque be something different in the world of asset management? And what role, if any, should values and religious faith play in shaping the firm's products and conduct?

Keywords: sustainability; ESG; social business; entrepreneurs; scaling; emerging market entrepreneurship; not for profit; entrepreneurial finance; mentoring; business networks; hybrid nonprofit funding; Investing; investment management; Asset Management; Values and Beliefs; Religion; Personal Development and Career; Business Startups; Social Enterprise; Social Entrepreneurship;

Citation:
Serafeim, George, Rebecca Henderson, and Shannon Gombos. "Omar Selim: Building a Values-Based Asset Management Firm (A)." Harvard Business School Case 115-021, January 2015. (Revised September 2017.) View Details

Cite View Details Educators Purchase Related

Tiffany Pham taught herself to code and created a technology platform, Mogul, with the goal of providing girls and women around the world with information and opportunities. After several years Mogul had reached more than 146 million women around the world and had measurable outcomes in increasing the diversity of talent pipelines for major Fortune 500 companies that served as its clients. The case explores Pham’s journey in building Mogul and the idea of moving into other business lines, such as media or venture capital, making Mogul not just a place for people to connect but also a global brand.

Article | Financial Analysts Journal | 2020

Public Sentiment and the Price of Corporate Sustainability

George Serafeim

Combining corporate sustainability performance scores based on environmental, social, and governance (ESG) data with big data measuring public sentiment about a company’s sustainability performance, I find that the valuation premium paid for companies with strong sustainability performance has increased over time and that the premium is increasing as a function of positive public sentiment momentum. An ESG factor going long on firms with superior or increasing sustainability performance and negative sentiment momentum and short on firms with inferior or decreasing sustainability performance and positive sentiment momentum delivers significant positive alpha. This low sentiment ESG factor is uncorrelated with other factors, such as value, momentum, size, profitability, and investment. In contrast, the high sentiment ESG factor delivers insignificant alpha and is strongly negatively correlated with the value factor. The evidence suggests that public sentiment influences investor views about the value of corporate sustainability activities and thereby both the price paid for corporate sustainability and the investment returns of portfolios that consider ESG data.

Keywords: sustainability; ESG; ESG (environmental, social, governance) performance; investment management; investment strategy; big data; Machine learning; environment; Environmental Sustainability; Corporate Governance; Performance; Asset Pricing; Investment; Management; Strategy; Human Capital; Public Opinion; Value;

Citation:

Serafeim, George. "Public Sentiment and the Price of Corporate Sustainability." Financial Analysts Journal 76, no. 2 (2020): 26–46. View Details

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Omar Selim: Building a Values-Based Asset Management Firm (A)

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