MAPFRE, a Spanish insurer with €42 billion in AUM, is consolidating private debt fund commitments made by various subsidiaries into one €350 million vehicle, for which “priority will be given to ESG criteria”, according to a press release from the company.
The existing commitments will make up approximately two-thirds of the fund’s total value, leaving around one-third of the capital for new investments.
General manager Javier Lendines told New Private Markets that the product is structured “effectively as a fund of funds”, as “no direct investments in loans are contemplated”. The insurer aims to invest in 15 fund managers, primarily in Europe.
ESG criteria will be a key consideration at the due diligence stage. Lendines explained that MAPFRE “evaluates the commitment of the manager in ESG aspects, for example, training or qualifications required or provided to employees, good corporate governance practices, appropriate remuneration systems.
“We study the demands made by the fund management team to the companies to which they provide financing – what type of commitments are requested of them, how they are rewarded or punished through spreads for compliance with KPIs – we analyse whether the covenants include specific commitments on ESG aspects,” Lendines added.