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ESG factors solidifying in alternative asset investments
Other - AUGUST 30, 2019

ESG factors solidifying in alternative asset investments

by Andrea Zander

The vast majority (93 percent) of survey respondents said their private equity funds’ performance has either met or exceeded expectations in the past 12 months, according to a survey by Preqin.

Investors are also satisfied with private debt, real estate and infrastructure funds, but some other asset classes were cause of consternation. Almost half (46 percent) of hedge fund investors said those assets didn’t meet expectations, while 37 percent said the same of natural resources.

The survey also found environmental, social and governance factors are solidifying their relevance within alternative asset classes. Nearly half of investors said they have turned down the opportunity to invest in a fund because it didn’t comply with their ESG policies. Among those surveyed, 8 percent of investors said they frequently turn down funds for these reasons, while 40 percent said they do it occasionally.

By asset class, survey respondents were most likely to have an ESG policy in place for private equity investments (35 percent), followed by real estate (28 percent), infrastructure (27 percent) and private debt (23 percent).

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