This Pivot book focuses on both the essentials of asset management and current industry trends, specifically the development from an active management approach to a focus on ESG investments. The first part of the book outlines the dynamics that have traditionally characterised the asset management industry, including the distinction between active and passive portfolio management, the emergence of Exchange Traded Funds (EFTs) which have dominated portfolio allocation over the last 25 years, and the growth of the factor investing approach. It then explores how ESG principles have evolved into a primary focus for investors over the last few years, and how the growing importance placed on the establishment of homogeneous ESG criteria across companies now involves investors and asset managers as well as regulators. The final section of the book considers climate finance as a new challenge for asset management, which insists on portfolio choices that aim to mitigate the effects of climate change.

This book offers new perspectives on the academic debate around differing investment philosophies as well as offering an empirical analysis of ESG benchmarks used across the industry. It will be of interest to academics and practitioners in finance and banking broadly, including those working in climate finance, investment behaviour, and corporate governance.

Enrica Bolognesi is an Associate Professor of Financial Markets and Intermediaries in the Department of Economics and Statistics of the University of Udine. She is the Director of the Bachelors and Masters Degrees in Banking and Finance. Previously, she worked in the asset management industry as equity portfolio manager.

1. Introduction.- 2. The impact of index design on asset management.-3. Pros and cons of Active management.- 4. Searching for market drivers: Factor investing.- 5. Hybrids increasingly blurring active/passive line.- 6. The need for a change: Sustainable finance.- 7. The next challenge: ESG and Climate investing.