In brief: EDCI opens up to private credit GPs

EDCI benchmarks can be used to shore up the ESG-linked loans market.

The ESG Data Convergence Initiative has opened up membership to private credit firms, New Private Markets has learned. Private credit firm members will be able to access the EDCI’s benchmarks, which can support their lending decisions and pricing models. In particular, these benchmarks can help firms issuing ESG-linked loans to set targets and monitor borrowers’ performance more consistently and precisely.

The EDCI is not yet collecting data from private credit GPs – in part because there is a risk of double-counting where the borrower is private equity-backed and both the sponsor and lender are contributing the same data. The EDCI is looking for ways to circumvent this issue, NPM understands. It is also looking into developing a platform to enable private equity GPs to share their ESG data with lenders.

Among EDCI’s GP members are private debt giants Apollo Global Management and Ares Management, both of which also manage significant private equity strategies. Apollo is the inaugural chair of the ESG Integrated Disclosure Project, a data harmonisation project designed for the private credit and syndicated loan market launched in 2022.