Menu
Banking Exchange Magazine Logo
Menu

Private Equity Managers Prioritizing ESG Over New Deals

Managers say they are implementing ESG or impact strategies to “do their part” to tackle the climate crisis, new report finds

  • |
  • Written by  Banking Exchange staff
Private Equity Managers Prioritizing ESG Over New Deals

Private equity fund managers intend to direct most of their capital to setting up impact funds or investing in targets with ESG-focused themes, according to new research.

Audit and consultancy group BDO’s Spring 2022 Private Capital Pulse Survey polled 200 US private equity fund managers and found that impact funds and ESG strategies are becoming more of a priority than new deals for managers.

BDO said its survey was not designed specifically to focus on ESG, with questions about value creation, exit planning and deal-making. 

However, ESG “emerged as a solid strategic underpinning”, it said, with 99% of those surveyed have already identified an ESG strategy, with objectives including increasing value at exit, and talent retention.

Half of private equity managers claimed that they would direct most capital towards ESG-focused themes in the next six months, compared to 14% who intend to direct it to applying equity relief to portfolio companies. 

More than one-third, or 38%, of fund managers are adopting and implementing an ESG strategy to “do their part” to address the threats of climate change.

“Limited partners and the public at large have been clamoring for ESG action, and funds are responding,” said Verenda Graham, tax partner and national private equity practice co-leader at BDO. 

Graham added: “Among the fund managers who said they are raising an impact or ESG fund, 46% said their top post-M&A challenge was improving performance.”

Less than 1% of fund managers said they did not perform an ESG assessment on new investments. 

back to top

Sections

About Us

Connect With Us

Resources

WEBINAR:

Belt and Suspenders

Date/Time: October 19, 2:00 CT / 3:00 ET

How Multiple Layers of Defenses Work Together to Keep Your Bank Covered

Cyber threats and attack vectors are ever-changing, especially due to the current geopolitical climate and distribution of data. Financial institutions remain attractive targets for cyber criminals due to the amount of sensitive data they hold. Join CSI’s Director of Product Strategy, Sean Martin, for his insight into why and how institutions should embrace a holistic cybersecurity approach to strengthen their defenses against these evolving threats. You’ll learn: 

REGISTER NOW!

This webinar is brought to you by:
OneSpan logo