Fundraising for climate strategies has remained resilient despite the slowdown in LP commitments over the past year, according to Monument Group.
The placement agent hosted New Private Markets and other journalists at the Penn Club of New York this week for a roundtable evaluating fundraising conditions in private markets. It “continues to be a very challenging environment”, said John McCormick, a partner at the firm. But mid-market private equity funds along themes such as “healthcare, industrials, a little bit of consumer are still of interest [for LPs]. And then there are these newer areas in terms of the green energy or climate transition funds, where there are some secular tailwinds.
“We’re going to see more and more of those [strategies] emerging as some of these natural resources managers are pivoting to tap into the new energy market.”
ESG has remained important across the market. It has become “part of diligence for pretty much every fund,” said McCormick. “Everyone has a different level of sensitivity around it. It’s something that we know our clients have to address to some degree, but everyone’s a little bit different as to how deep you have to go.”
“The one thing that always comes up with a lot of LPs is diversity – they want diversity within [the GP’s] team. I think that’s an underlying theme that’s not going to go away.”