Smart or Ethical Money — Meridiaan's 90-Day Mandate

A four-round, advanced asset-management simulation set inside Meridiaan Asset Management B.V., an Amsterdam fund manager (€9.2bn AUM).

You take over the €2.4bn Meridiaan European Equity Fund, benchmarked to MSCI Europe and charging a 0.85% management fee, on the day a Morningstar-style downgrade lands and the firm's largest pension client (€640M) issues a 90-day ultimatum: deliver an SFDR Article 9, fossil-free strategy AND close a three-year net underperformance gap of 60 bps annualized — or it redeems and moves to an index-plus-ESG product at a quarter of the fee.

The simulation operationalizes Jenke ter Horst's central question — is ethical money also smart money? — and his finding that responsible (SRI) screening need not systematically destroy risk-adjusted return but does reshape the risk profile, raise tracking error, and constrain the opportunity set; plus the literature on weak, reversing performance persistence and the dominance of net-of-fee thinking.

Round 1: diagnose the 60 bps gap into selection, allocation, fee and screening effects, name the dominant driver (the fee, which turns a +25 bps gross alpha negative), read performance persistence as weak-and-reversing, and refuse to call past wins skill until tested.

Round 2: choose the SRI screen along a spectrum (light exclusions, an ESG-rating floor, best-in-class tilting, or full Article 9 fossil-free that excludes ~22% of the benchmark and drives tracking error toward 4.0-4.8%), then set the SFDR claim as a compliance decision — the factsheet must match the holdings or the AFM opens a contagious greenwashing inquiry — and hold discipline when an excluded energy stock jumps +18%.

Round 3: construct the portfolio, weighting performance-persistence signals (which reverse after costs) against valuation and quality, set an active-risk budget (an aggressive bet on an Article 9 screen creates accidental concentration), decide the fee (no screen fixes a fee above the gross edge), and prepare a flows-contingency plan for the €250M inflow / €200M redemption events.

Round 4: present a defensible, evidence-based verdict to the pension CIO and the board, propose the Year-2 mandate, and prove the alpha was skill not luck via attribution.

The math rewards the evidence-based path — a disciplined screen with a matching claim, light persistence weight, a fee below the gross edge, and a flows plan — and punishes the five classic errors: chasing reversing persistence, adopting Article 9 blind to risk, overclaiming greenness (greenwashing), ignoring the fee drag, and managing the book in a vacuum, as well as answering smart-vs-ethical as ideology rather than evidence.

Final KPIs track net alpha vs MSCI Europe (bps), tracking error (%), fund AUM / net flows (€M), ESG integrity (0-100), and the survival of the €640M pension mandate.

An advanced simulation for participants used to working with the main frameworks and trade-offs of the subject, designed for executive education and experienced professionals.