Asset owners are priming their external managers to add impact considerations into future fund documents, according to a research report from the Global Impact Investing Network. GIIN interviewed 25 organisations, mostly asset owners, to ascertain the best way to engage with asset managers in impact.
The report highlights the five obstacles to asset managers wishing to engage with their external managers on impact. One of these is the “lock-in” effect: once investment and legal terms have been set, it is “exceptionally challenging to introduce a new clause or amend the agreed upon strategy,” the report notes.
“Some asset owners have shared that there is scope to revisit investment and legal documentation in subsequent funding rounds, presenting opportunity to incorporate impact formally in later funding stages,” the report states.
The 14-page report draws on an impressive roster of interviewees and is well worth a read.