During our recent update to Asset Allocator’s ESG database, we were a little surprised to find that Investec’s suite of sustainable portfolios was no longer there. 

Puzzled, we asked what had happened and it turns out the range has fallen victim to Investec's 2023 merger with Rathbones. 

This is the combination of words which Investec sent us: 

“A significant benefit for advisers resulting from the Investec combination with Rathbones is the enhanced investment capability, offered by the enlarged Rathbones Group .

"This enhancement plays a crucial role in our ongoing evaluation of products and services across the group, ensuring we effectively address the evolving needs of advisers throughout the UK. As we continue to develop our investment proposition through the combination, we will share updates on how sustainable investment solutions will be integrated into our proposition for advisers.”

Rathbones has its own suite of ESG portfolios, the Greenbank range, which must have been deemed sufficient so as to close its sister offering. 

Indeed our colleagues at FT Adviser noted in January that while Rathbones funds were hoovering up assets, Investec W&I managers were bleeding cash. 

But since then, the merger has paid off: Rathbones saw profits before tax rise 120 per cent to £112mn in the first half of 2024, its interim results showed.

We do wonder, though, how much of these ‘synergies’ came at the cost of the Investec side, as no merger is created equal. 

And part of us wonders whether outflows from sustainable propositions in general have played a part.

MPS providers we have spoken to tell us they feel they are obliged to run some sort of ESG offering to get onto as many platforms as possible.

Indeed the team at Platforum told us that most advisers who use model portfolios have put at least some client assets into ethical or sustainable portfolios but this "hasn’t translated into significant assets".

“MPS providers we’ve spoken to describe flows into their sustainable model portfolios as minimal,” said Richard Bradley, research director at Platforum. “Demand hasn’t recovered from poor performance in 2022.”

Indeed Nextwealth reported that assets in sustainable portfolios fell slightly to 9 per cent of total assets in the MPS world, indicating slower growth than the wider market.

Investec have obviously decided the flame isn't worth the candle. With growing regulatory creep in this sector, might others make a similar call?