Nordis Capital: Using Financial Markets to Address Key Societal Issues

With expertise in asset management, financial research and public policy, Nordis Capital (NC) provides investment solutions that help achieve higher, long-term risk-adjusted returns while committing to sustainable development. As conveyed by its inspirational website, the young firm aims to preserve and grow the world’s human, social, natural and financial capital.

The outstanding diversity of knowledge of the team, as well as   an investment strategy based on mitigating climate change and reducing social inequalities are among NC’s distinctive characteristics. The company works to change the world, one investor at a time.

“As Montréal positions itself as a sustainable finance hub in North America, our goal is to make our new investment firm and our world-class research company key players of this ecosystem.”, explain François Boutin-Dufresne, Managing Partner at Nordis Capital.

Research: A Steppingstone for Smart Investing

It was a logical choice for François B.-D., one of Nordis Capital’s Cofounders, to focus the firm’s operations on priorities determined by environmental, social and governance (ESG) issues. Indeed, as one of Québec’s pioneers in the field, he wrote his master’s thesis on the risks of sustainable investment over 20 years ago. With this interest and building on his experience in   international development financing, economics, strategy, and financial markets, his ambition to use capital markets to tackle social inequalities and climate change led him to launch Sustainable Market Strategies (SMS) in 2018. The sustainable investing research firm has published over 250 responsible investment strategy notes that are read by esteemed clients around the world.  

François Boutin-Dufresne, Managing Partner at Nordis Capital

NC is therefore a natural “offshoot” of SMS: an applied version of the research company. The firm was arecipient of an honourable mention in the “Innovative Approach to ESG Integration” category as part of the Great Canadian ESG Championship #ESGChampionship held in the spring of 2022. This is a testament to Nordis’  dedication to developing investment strategies that are aligned with its values, namely the key topics in building a better future.

In an era when it is all too easy for  asset managers to use greenwashing to attract investors with so-called “green” portfolios, Norids  prefers to put words into action and it does not hesitate to use   innovative strategies like its Long/Short Global Alpha ESG fund, which focuses on MSCI ACWI shares, fixed-income markets and commodities.   “We did our homework, through years of research, which  allowed us to launch a product of proven quality that was already quite green before we decided to promote it as such”, François B.-D. explains, clearly proud of NC’s uncommon approach.

Investing in Change

The transition in today’s investment world calls for innovation,. “We are in an excellent position to meet today’s striking needs when it comes to protecting our environment; fighting against social inequalities; managing socio-demographic phenomenon such as the retirement of baby boomers, or geopolitical ones and the historic inflationary increase”, François Bourdon, NC Managing Partner, mentions.

While everything that has to do with ESG issues is often seen as a constraint and a set of risks to manage when investing, the firm wants to show how the current transition involves not only energy, but also many other environmental and social aspects. “There is a wealth of opportunities to seize and if our fund becomes  successful, it’s because investors have understood how ESG is not simply a reporting exercise, it’s actually an essential part of macroeconomics”, Lenka Martinek, NC Managing Partner, highlights.

In 2020, the SMS team therefore realized it could use its research to generate a lot of alpha through responsible investment. Inspired by a recommendation from several industry stakeholders, that’s when NC’s founding committee launched its flagship hedge fund (Long/Short Global Alpha ESG) with its own capital. Since then, the firm has shown the strategy’s ability to deliver  great results and receive critical early investments from QEMP the following year. A true kick-off for NC, QEMP’s support also helped build confidence among institutional clients.

A Unique Team

Unlike many asset management firms that were founded by teams  that had been working together for a long time, the SMS-NC clan was formed around 2017. François B.-D., who has known SMS’ Cofounder Félix-A. Boudreault since high school, convinced Félix to join him on this adventure. Previously, Félix was the  Director, Policy and Negotiations for Environment and Climate Change Canada and took part in the energy transition as an engineer at the Canadian Ministry of Energy and Natural Resources. Passion for finance and climate issues brought the two entrepreneurs together.

As an actuary and with an insatiable  thirst for knowledge, François Bourdon started his career in the insurance sector. He was then drawn to the investment world and worked at Fiera Capital for several years as a Portfolio Manager and Global Chief Investment Officer, where he gained investment management experience in various asset classes. “What attracted me to sustainable finance is the desire to change the way capital is distributed”, he says. “When François B.-D. called me, he was the second person to propose a new project to me and once I left Fiera Capital, I knew right away that this is what I wanted to do. , I joined the firm in September 2020”, he recalls.

Lenka Martinek, the youngest of the group, has always been driven by the search for answers and macroeconomics are simply in her DNA. “I’m like the child in the family, constantly asking ‘But why??’”, she explains. She made a career out of her quest for explanations;  as part of her experience at BCA Research, she analyzed the financial marketplace to understand things like the reasons why unemployment rate is different from one place to another, and how that impacts monetary policy and capital allocations. Lenka then chose to take the leap from macroeconomic research to investment management and joined PSP Investments as Portfolio Manager, Currencies and Global Macro.. Before turning 40, she was noticing a gap between her non-professional  preoccupations  and the time it was taking for the investment industry to react to climate change. She completed a master’s degree in sustainable development and management at HEC Montréal to, you probably guessed, find the source of such a gap between needs and market inertia. This is when François Bourdon convinced her to join SMS. “The Nordis project really spoke to me, because it is  the application of fundamental research to influence outcomes surrounding critical challenges that we will be faced with for decades.”, Lenka says.

This unique team’s strong set of skills adds to the benefits of an emerging firm that is focused on results and is highly driven, as well as contributing to the  local sustainable finance ecosystem. The company developed its infrastructure from scratch and in the process, has created interesting job opportunities that appeal to people with diverse talents, which is also an asset for a firm like NC. “And what we do engages certain clients who are not necessarily the most active in sustainable investment, which diversifies our group of investors”, François B points out.

In the years to come, the NC team will work to generate  solid returns to expand its client base and focus on its goals:  to leverage capital markets to reduce the impact of climate change and fight against  social inequalities.

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