MJ Hudson is seeing “a lot of demand from LPs for ESG data about their fund managers in private equity and venture capital”, says Emma Bickerstaffe, ESG director at the fund administrator.
That’s why MJ Hudson has developed its own ESG assessment tool. ESG Advantage sends fund managers firm- and fund-level questionnaires so that investors receive ESG scores and analysis for their portfolio and can compare investments. Other fund administrators have launched similar products, including Apex, IQ-EQ and SS&C.
MJ Hudson has no plans to reinvent the wheel. The KPIs this platform measures are “fairly standard coverage” and “nothing unique”, says Bickerstaffe. That’s for good reason: “So that firms can focus on what’s most relevant and important. Investors are not only interested in policy coverage around [ESG] issues but also their performance against these metrics. Performance and progress over time is more important for them than improving your questions or having new KPIs.”
ESG Advantage is a simplified version of another product that MJ Hudson has provided to its fund manager clients since 2015. Its KPIs are aligned to several industry frameworks and benchmarks, including ILPA, says Bickerstaffe – but go beyond what the UN-backed PRI framework asks: “Investors and fund managers are looking for a more detailed level of analysis which is more KPI- and data-driven [than PRI]. UN PRI is of interest and relevance to the industry, but with regulations and industry collaboration, we’re seeing the demand for more specific data.”