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Laxman Pai, Opalesque Asia: More than eight out of 10 PE funds (84%) monitor their portfolio companies on environmental, social, and governance (ESG) issues, while only 60% of growth/venture funds and 11% of credit funds do, said a study.
While private markets investors continue to embrace ESG factors in their investments, private credit and growth equity/venture funds lag private equity investors on several fronts, including portfolio engagement and monitoring.
While 100% of PE investors surveyed already incorporate ESG into their investment process, the figure drops to 86% for growth/venture funds and 64% for credit funds, according to Malk Partners ESG survey to capture the evolving perspectives of GPs.
The report-which queried 51 private equity, credit, growth equity/venture capital, and hedge funds with combined total assets under management (AUM) of nearly $750B -found that the vast majority of GPs have already integrated ESG considerations into their investment process.
The widespread ESG integration has been driven largely by LPs. An overwhelming majority of respondents (98%) cited LP demand as one of the primary reasons why they are integrating ESG into their processes. Other drivers included risk management (67%), alignment with peers (53%), value creation (51%), and regulatory pressures (40%).
Meanwhile, a majority of private equity funds collect KPIs on ESG from their portfolio companies and engage in ESG discussions. Yet 56% of credit respondent...................... To view our full article Click here
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