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Laxman Pai, Opalesque Asia: Hedge fund firms continue to be laggard compared to other alternative investment firms when it comes to cuddling environmental, social, and governance (ESG)-oriented investing strategies, a new report from Preqin revealed.
Although a significant proportion (65%) of hedge fund managers surveyed by Preqin intend to have an ESG policy by the end of 2019, this pales in comparison to private equity, where 53% of managers already have ESG policies in place and a further 15% expect to by the end of the year.
However, many investors (29%) already have ESG policies in place specifically for their hedge fund investments, and a large portion (20%) are planning to do so in 2019.
There is a clear appetite for hedge funds to invest responsibly - and ignoring this may prove foolhardy in a fundraising market that is already incredibly challenging.
Responding to this investor appetite is the 20% of hedge fund managers surveyed by Preqin that have an ESG policy in place, and the further 15% that plan to implement a policy imminently.
Hedge funds exist to generate an absolute return across a range of markets and asset classes, using a variety of instruments to achieve a differentiated return stream. Therefore, constraining portfolios based on ESG considerations may be an anathema for some hedge fund managers, the report said.
However, with the gap between investors and fund managers on the subject set to widen, it is likely that those hedg...................... To view our full article Click here
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