Talking with… Columbia Threadneedle's responsible investing head Simon Bond

How did you get into fund management?

It was not planned! I started as a trainee accountant in a local office, which led me to investment accounting at Hambros Bank. I worked for Peter Hill-Wood, then Chairman of Arsenal. He organised parties at Highbury, which I enjoyed despite being a Tottenham Hotspur fan. I transitioned towards fund management, initially as a desk assistant for equity fund managers but also doing admin for David Tapper's bond desk. I was young, enthusiastic and asked all manner of stupid questions to learn as much as possible.

I moved to Provident Mutual after my experience at Hambros of Big Bang and the '87 crash to support the bond desk. I became an analyst in 1991 and the first credit I analysed was issued by the Peabody Trust Housing Association - the legacy of George Peabody. That gave me the idea that the hard-nosed financial world could have some benefits for society.

What was the attraction of becoming a bond investor?

Given my name it was that or become a spy! I am curious and back then bonds, unlike equities, were unknown- a dark art - and I wanted to find out more. Fast forward to 2013 when we had our first meeting with The Big Issue. They wanted an investment product to which they could direct people that shared their values and provided for long-term societal needs. The idea was developed with their eight areas of social outcome in mind and the Threadneedle Social Bond Fund was born.

Do you have to give up performance to achieve impact?

Impact investing used to imply sacrificing financial returns to achieve it, but I absolutely refute that now. It is simply not the case and I have spent the last six and a half years proving it. We don't use a specialist benchmark, we use a conventional one, Non-gilts (which includes local authority, supranational and agency bonds). With around half the constituents of the non-gilt market, we can deliver a corporate bond return for corporate bond risk.

At the same time we can stretch the target to compensate for the cost of active management, which we define as the difference between active and passive fees. In doing so we have beaten the index, and if you want to get technical and look at the Sharpe Ratio - which washes through the complexities of the index for duration etc - we are delivering on a risk-adjusted basis. It is down to central government to deal with naysayers who say that people should pursue purely financial returns or philanthropy. Authorities are behind the curve and if they ever do catch up, I know which side I would rather be on.

What excites you at the moment?

We have launched a campaign for a green gilt. A sustainable, social gilt could help pay for furloughing. If we get one, we will still campaign for more issuance as it won't be enough on its own. We encourage issuers and banks, who are really important in this, as we need to influence them as aggregators to follow the money through to SMEs to see the impact.

The idea is to facilitate borrowing big and lending small. We have helped the charities sector in this regard, which enabled small and medium-sized charities to access finance as they are not big enough to issue their own bonds.

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