Limited partners in private equity are increasingly planning to boost investment into the hydrocarbon value chain, according to a survey. 42 percent of LPs are either starting, maintaining or increasing investment in hydrocarbon-related private equity, according to Coller Capital’s research. Four years ago, the equivalent figure was 36 percent.
While the climate crisis has prompted widespread investor focus on decarbonisation, this year also saw heightened concerns about energy security and costs following the Russian invasion of Ukraine. The desire to increase exposure to the hydrocarbon value chain is part of a broader surge of interest in energy investing, with renewables being the most attractive play; 69 percent of LPs are either starting, maintaining or increasing investment in renewables, the survey says, compared to 55 percent four years ago.
The survey also suggests that a majority of LPs now feel they are equipped to assess how well GPs are measuring ESG performance, with 84 percent of European investors believing they are “fit for purpose” in their ability to make the assessment. The figure for North American investors was 72 percent and for Asia-Pacific LPs it was 43 percent.