Saturna's Patrick Drum on Islamic Finance, Faith-Based Investing, Sustainable Outcomes, ESG and More

Описание: Patrick Drum leads the Environmental, Social & Governance investment research at Saturna Capital, a private investment management firm with $5.5 billion in assets under management. He is the portfolio manager for Saturna’s Sustainable Global Fixed Income Fund; the Amana Participation Fund (the oldest and largest family of funds in the United States following principles of Islamic finance), and the firm’s institutional subsidiary, Saturna Sdn. Berhad in Kuala Lumpur, Malaysia.

Drum holds a BA in economics from Western Washington University and an MBA from Seattle University Albers School of Business and is a CFA® Charterholder and Certified Financial Planner®.

Previously, Drum was Chairman of the United Nation’s Principles for Investment (UNPRI) Fixed Income Outreach Subcommittee and an adjunct professor of finance for the Sustainable MBA Program at Pinchot’s Bainbridge Graduate Institute.

In our discussion, we hear about Patrick’s early career and how he came to be involved in sustainability back in 2008. We learn that about 50 percent of investors in Saturna’s Sharia compliant funds are not of the Muslim faith and discuss why a non-Muslim investor might be attracted to investing in their funds. Patrick describes the basic tenets of Sharia compliance, he speaks about the debt-like instrument that is called a ‘Sukuk’ and explains how they differ from traditional bonds. We hear about the screens Saturna uses and how each investment goes through a ‘Fatwa’ by a recognised Sharia body, and much more.

Show notes: https://sri360.com/podcast/patrick-drum

About the SRI 360° Podcast: The SRI 360° Podcast is focused exclusively on sustainable & responsible investing. In each episode, Scott Arnell interviews a world-class investor who is an accomplished practitioner from all asset classes. In my interviews, I cover everything from their early personal journeys—and what motivated and attracted them to commit their life energy to SRI—to insights on how they developed and executed their investment strategies and what challenges they face today. Each episode is a chance to go way below the surface with these impressive people and gain additional insights and useful lessons from professional investors.

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[00:00] Episode introduction

[05:15] How Patrick came to work in finance, starting as a mail clerk with Dean Witter Reynolds

[05:58] Patrick shares how he first became involved in sustainability in 2008

[06:58] We hear about Saturna Capital and the genesis of their signature fund, the ‘Amana Participation Fund’

[08:26] Sharia compliance and what it means in the investment world

[10:13] How Patrick came to chair the UNPRI Subcommittee of Fixed Income Outreach

[14:00] Patrick describes his role at Saturna and the two funds he manages

[18:05] We discuss what attracts non-Muslim investors to invest in Saturna’s Sharia compliant funds

[19:05] Patrick presents Saturna’s three main fund families

[20:28] Patrick gives us an overview of Sharia Compliance Investing for Muslim investors

[27:50] The definition of a Fatwa

[29:27] We learn about Saturna’s screening process

[31:21] The definition of Murahaba and how it is Sharia compliant

[32:32] How a green sukuk differs from a regular sukuk

[37:40] Patrick provides an example of a green sukuk

[40:18] We hear about the benchmarks used for the Sukuk fund

[43:25] How Saturna’s fixed income fund compares against traditional, fixed income funds

[49:16] We hear how Saturna’s funds performed during the Covid pandemic

[50:40] Patrick shares the Muslim community’s views on climate change in the Islamic world

[56:38] The ‘spirituality of imperfection’ and what it means

[57:04] The single most important challenge in the ESG fixed income space at this time

[57:27] What Patrick knows now about ESG investing that he wishes he had known when he joined Saturna

[58:31] Lessons learned from an investment that didn’t go to plan

[01:00:43] An example of an investment that worked out better than expected

[01:02:10] Patrick shares his advice on how to get into the ESG or Islamic investing space