While studying my A levels, I was given the opportunity to complete a week’s worth of work experience with Kimura Capital. In this time, I have learnt much about the specifics of hedge funds and the wider world of finance and been able to apply many of the concepts I have learnt in my study of economics to real-world scenarios.
During my time at Kimura, one thing that I have found interesting is the ethical side of investing, particularly the process of measuring ESG, and finding methods to quantify more subjective data, such as the environmental risk a firm may pose. A suitably extensive process takes place, in which firms are questioned on their actions that impact the factors of ESG, with consideration to both their current adherence to policies in place, and their active role in promoting long term sustainability. Examples of the latter that I have observed include diversifying products to gain more environmentally-friendly sources of revenue, and the promotion of a transition to low-carbon, renewable energy sources. Individual factors within each factor of environment, social, and governance are then scored, to create an average risk that the company will present, acting as a key factor in making or breaking a deal. An understanding of this process and its widespread use has given me an insight into the factors firms in the wider world must consider, incentivised by factors such as reputational gain.
ESG is just one aspect of an intricate process within commodity trade finance – between risk mitigation, compliance, KYC checks, account managing and marketing to name a few, I have been able to understand in greater depth the process of investment management beyond the basic outline, through several excellent opportunities such as conversations with employees, the chance to sit in on meetings and calls, and look over documents relating to current deals and other company actions. Overall, my experience has been an insightful one, supported by the help and expertise of employees, helping to open up and decipher the world of finance.