GPs view ESG as value builder – Capital Dynamics survey

More than three quarters of respondents in the survey said they would increasingly consider ESG factors as a value creation tool, with more than 25% answering that higher returns was one of the major factors in the decision to implement RI and ESG policies.

The survey also found that more than a third of GPs questioned had measured and experienced a positive effect on portfolio company EBITDA as a result of ESG and RI policies.

ESG has been a hot topic across the private equity industry in the past five years, with private equity firms increasingly hiring dedicated ESG managers and teams. Capital Dynamics' survey revealed that a majority of GPs had formalised their ESG and RI policies as a result of increasing LP requirements, and as a means to manage investment risk.

"The survey results show a strong industry-wide acknowledgement of the value ESG and RI can play in an investment strategy," Angela Willetts, Capital Dynamics' co-head of private equity investment management, said in a statement. "When applied strategically, rather than as a token marketing gesture, they can produce tangible results that are directly reflected in returns for investors. Many GPs are already experiencing a positive impact on EBITDA as a result of adopting ESG/RI principles and we are not surprised by this result – what was a trend for some is now becoming a priority for many."

The survey gathered opinions of senior management from 109 GPs in Europe (45%), North America (37%), Asia-Pacific (18%) and the rest of the world.

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• Topics
• LPs
• GPs
• Performance
• ESG
• Capital Dynamics