Why Larry Fink should attend Allocate

Three years ago, we launched Allocate on the premise that private market investors needed a forum to understand how mega-trends would drive future returns. The response was encouraging. Investors managing more than $3tn in assets have attended the event each year to form their response to the transformational era we are living in. 

An ageing global population, next-gen consumers, smart industry, urbanisation and climate change are all hotly debated topics; and many challenges lie ahead. 

One is how responsible investors can encourage more sustainable corporate behaviour. BlackRock's $13.8bn private equity allocation could be a good place to start.

Private equity ranks highly for governance standards among investors. The active management of companies, whether through private equity funds or direct investments, gives it the clout it needs to influence CEOs. While many will judge BlackRock's voting record as a public shareholder, its actions in private equity could act as an important indicator of intent.   

Another headache for Fink is inconsistent data. By putting sustainability at its core, ESG criteria is now gaining parity with more traditional financial considerations. But the ongoing efforts to agree global ESG standards remains an obstacle to reporting (although many groups are working hard on this conundrum). At Allocate, some of the leading thinkers around standardised disclosure have been heard. The External Rate of Return, backed by £2m in funding at Kings College London, is one such platform. It aims to give a consistent measure for economic and social impact. 

Will Fink's letter move the needle? Mobilising more investors to adopt this stance is what is needed to tip the balance. Mitigating climate change will, after all, require vast inflows of capital. David Wilton, former head of impact investing at Morgan Stanley Alternative Investment Partners, proposed to attendees last year that the future cost of capital will be determined by its impact. One conclusion of his research says that investments with lower impact will be more expensive to finance. The decision taken by an institution with $7tn in assets could have brought us one step closer to such an inflection point. 

For Fink, and like-minded investors, the invitation to attend Allocate 2020 is open.

The next edition of Allocate will be held on 18-19 June at the Grove Hotel in Watford, outside London. Click here to check out the agenda and see how you can get involved

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