Investment consultant conflab
A group of 14 investment consultants is forming a working group on sustainability to swap notes on three core topics: stewardship, regulation and reporting. Snehal Shah has the details here. Item one on the agenda: provide a joint response to the US Securities and Exchange Commission’s request for comment on the climate change disclosure regulations.
Impact: The allocator’s challenge
As I write this our research-focused colleagues are putting the finishing touches to a ranking of impact capital managers. Using the tried and tested methodology of our other rankings, we are building a list of the largest impact managers based on capital raised in the last five years.
We are using the GIIN’s definition of impact investing as having four essential characteristics: there is intentionality (you can’t retrospectively lay claim to “accidental” impact); there is an expectation of a financial return (you’re not giving money away); those returns can range from market rate to “concessionary” and can come from various asset classes (impact is a broad church); and impact is measured and reported.
No doubt there will be debate about who should and shouldn’t have capital included in our count: we look forward to that. What is clear to us at this stage is that the impact investing universe – certainly at the large end – is populated by three types of beast.
There’s the native impact manager: the pioneers that sought to define the strategy and – had we made this list 10 years ago – would have been at the top, ploughing a relatively lonely furrow.
Then there’s the multi-strategy entrant: those established private markets brands that have recognised a demand for impact-at-scale, leveraged their existing platforms and raised big funds off the bat.
Finally there is the “impact-in-everything-but-name” crowd. These are firms that were either established with – or have instilled – a genuine culture of impact to the extent that they meet GIIN’s four characteristics of impact for all their funds.
Can any of these groups claim to be more credibly “impact” than the others? Not according to the BlueMark report that we highlighted earlier this week.
Less than a quarter of firms are “not looking at” investing for impact, according to a survey from PwC. The rest of the manager universe is either addressing impact in some way, planning on setting an impact fund up in the next year, or calling itself an impact manager. Where does this leave capital allocators? With growing choice and a challenge that we – in working out who makes it into the ranking – sympathise with.
PE’s approach to climate
Looking for a quick benchmark with other managers to compare your approach to climate risk? These three charts from PwC’s recent responible investment survey are a good place to start.
Diversity in the comp mix
Kewsong Lee, the CEO of private markets giant Carlyle, will see his compensation tied to a “comprehensive set of metrics” including the hiring and development of an inclusive culture, as well as meeting the company’s target of having 30 percent of board seats of its portfolio companies filled by diverse candidates by 2023, according to a report on Bloomberg.
Bill to pay
Former TPG impact lead Bill McGlashen has been sentenced to three months in prison for participating in a vast US college admissions fraud, reports Reuters and other outlets. He will also pay a fine of $250,000.
Private equity healthcare firm Apposite Capital has hired a “talent and human capital” director to – among other things – “enhance its talent pool and diversity & inclusion programmes”, the firm said.