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Laxman Pai, Opalesque Asia:

There are $3.1tn of private capital assets under management (AUM) by firms that are committed to ESG investing as of October 2021, said a study.

This compares with $8.52tn of private capital AUM globally or 36% of the total, said Preqin's ESG in Alternatives Report 2021.

The report said that fund managers with established ESG policies are also responsible for a significant portion of total private capital fundraising. Preqin estimates that ESG-committed managers raised $403bn in the first nine months of 2021, compared to $506bn raised throughout the whole of 2020.

Preqin's report also found that private debt has the highest rate of ESG commitment of any asset class, with 49% of its AUM committed to ESG. Private equity also pulls ahead with $1.82tn AUM focused on ESG funds, the greatest amount of all the alternative asset classes. On the other hand, ESG commitments are at their lowest rate among infrastructure managers, at 31% of AUM.

Carbon emission trading is likely to prove a key component in achieving net-zero goals. It also means that carbon is likely to develop as an asset class, providing a new set of opportunities for private capital investors and fund managers.

Meanwhile, the desire to integrate ESG principles runs high with private asset investors and managers, as 76% of investors have seen an increase in demand for their organization's ESG capabilities over the past 12 months, according to Preqin's H2 2021 Investor Ou......................

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