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Regulations / Understanding ESG
Preqin enables clients to benchmark ESG funds
Performance analysis enhances decision-making, accountability in private markets
The Asset 12 Apr 2024

Data provider Preqin has launched its environmental, social and governance (ESG) fund performance benchmarks – additions to its global benchmark solutions – that, for the first time, enable clients to directly analyze the performance of sustainability funds within the context of the wider private markets, excluding hedge funds.

By using the ESG fund performance benchmarks, clients can comprehensively analyze, the company points out, the performance of ESG-labelled funds with other ESG or non-ESG funds, and deep dive into over 200 ESG fund performance benchmarks, covering more than 1000 ESG funds, including Sustainable Financial Disclosure Regulation (SFDR) funds.

This expansive coverage encompasses ESG fund labels – ESG integration, impact, climate, SFDR Articles 8 and 9, Sustainable Development Goals and Shariah-compliant – across the main private market asset classes of private equity, venture capital, real estate, private debt, natural resources and infrastructure.

With improved means of assessing performance, through different tools and comprehensive data, the data provider notes, investment professionals can now drive meaningful performance analysis and make informed investment decisions when it comes to ESG and impact investing.

Investors will be able to benchmark quality funds and fund managers as part of their sustainability strategy. Conversely, fund managers can benchmark ESG fund performance and articulate, with confidence, their performance outlook and ESG credentials back to investors. Meanwhile, advisers may unlock the latest ESG market intelligence, the company states, “in a timely manner, and share important information with their customers regarding new market opportunities and challenges”. 

“Through our benchmark offering, we aim to unleash the power of data to increase transparency around the performance of ESG funds to enable more opportunities for capital to flow to sustainable investments,” says Jaclyn Bouchard, the data provider’s head of ESG solutions and corporate responsibility.

Fabien Chen, the company’s head of benchmarks, adds: “With this latest launch, we hope to give practitioners another tool to help them to understand whether ESG funds outperform the market or their non-ESG peers, bringing further transparency and objectivity to enhance decision-making and accountability in the private markets.”

 

 

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