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

Aperture Investors is a startup investment firm that seeks to disrupt the asset management industry through competitive differentiation by charging investors primarily when its portfolio managers outperform the marketplace. Headed by Wall Street veteran Peter Kraus and backed with substantial and patient seed capital, Aperture seeks to attract both star portfolio managers and assets from mutual funds and hedge funds. Kraus believes that his innovative business model addresses the current dysfunctional fee and incentive structures in the industry, which have led to long-term market underperformance, and that Aperture will address the reasons that are motivating investors to shift to cheaper, passively-managed index and exchange-traded funds.

Despite efforts to crack down on illegal activity, crimes like fraud, bribery, embezzlement, and money laundering are rampant in corporations. What steps can leaders take to fix this growing problem?

Article | Management Science | July 2019

Market Reaction to Mandatory Nonfinancial Disclosure

Jody Grewal, Edward J. Riedl and George Serafeim

We examine the equity market reaction to events associated with the passage of a directive in the European Union (EU) mandating increased nonfinancial disclosure. These disclosures relate to firms’ environmental, social, and governance (ESG) performance and would be applicable to firms listed on EU exchanges or with significant operations in the EU. We predict and find (i) an on average negative market reaction, (ii) a less negative market reaction for firms having higher pre-directive nonfinancial performance, and (iii) a less negative reaction for firms having higher pre-directive nonfinancial disclosure levels. Results are accentuated for firms having the most material ESG issues, as well as investors anticipating proprietary and political costs as a result of the mandated disclosures. Overall, the results are consistent with the equity market perceiving that this disclosure regulation of nonfinancial information would lead to net costs (benefits) for firms with weak (strong) nonfinancial performance and disclosure.

Keywords: nonfinancial information; nonfinancial performance; ESG; ＂ESG (environmental, social, governance) performance; investor behavior; disclosure; disclosure regulation; regulation; sustainability; Corporate performance; Information; Corporate Disclosure; Governing Rules, Regulations, and Reforms; Performance; Environmental Sustainability; Corporate Governance; Outcome or Result;

Citation:

Grewal, Jody, Edward J. Riedl, and George Serafeim. "Market Reaction to Mandatory Nonfinancial Disclosure." Management Science 65, no. 7 (July 2019): 3061–3084. View Details

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

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