New industry research has been published by the Alternative Credit Council, the private credit affiliate of the Alternative Investment Management Association, and global law firm Dechert LLP, entitled: ‘In Partnership: Trends in Private Credit Fund Structuring how private credit fund managers are increasingly providing investors with customised exposure to the asset class’.
Tabula research finds majority of investors believes ESG crucial in fixed income decisions
New research from European ETF provider Tabula Investment Management (“Tabula”), surveying 100 European institutional investors and wealth managers with combined assets under management of over EUR150 billion, found that 98 per cent say that ESG data is important to informing their fixed income investment decision-making with two thirds emphasising that it is very important (please see the attached press release).
The research reveals that the majority of investors and wealth managers surveyed use more than one ESG data provider. Just over half said they use two providers; 11 per cent use three; 2 per cent use four.
When asked to rank what drives the decision to use ESG data providers to support fixed income investment decisions, respondents rated quality of rating methodologies as most important; ease of use (reporting, platforms) was second; geographical coverage third; and issuer coverage fourth.
In terms of the types of ESG data investors and wealth managers source from third-party providers:
58 per cent cited Sustainable Finance Disclosure Requirements, principal adverse impact and other regulatory reporting requirements information.
More than half (55 per cent) ask for ESG ratings while half of those surveyed seek raw corporate data disclosed by issuers such as emissions data and gender pay gap figures.
Forty-six percent say they look at business involvement screens, while 38 per cent analyse data on climate risk and temperature scores.
More than a third (36 per cent) seek data on alignment with the Sustainable Development Goals and the same number source information on impact ratings.
Almost all those surveyed say that differences between providers’ ESG ratings for the same issuer make using that data a challenge. One-quarter say inconsistencies make it very challenging to use the data while 69 per cent say it is quite challenging. Only 6 per cent say that discrepancies between ESG ratings for the same issuer do not make ESG data use a challenge for fixed income investment decision making.
Transaction cost analysis (TCA) lacks transparency, offers an incomplete picture of trading efficacy and makes it hard to genuinely compare performance. This is the damning assessment of the asset management sector from consultancy Bfinance.
Investment manager First Sentier Investors has launched a nature and biodiversity guide for institutional investors to identify, assess materiality and responses to nature and biodiversity risks in portfolio companies.
TPT Retirement Solutions (TPT), a UK workplace pension scheme, has secured regulatory approval from the Financial Conduct Authority (FCA) to set up a commercial investment company to provide new services to DB schemes.
The Trustees of the BAE Systems Pension Scheme and BAE Systems Executive Pension Scheme have outsourced the management of their approximately GBP23 billion UK defined benefit pension scheme assets to Goldman Sachs Asset Management.
A BNP Paribas survey of 420 asset owners and managers, hedge funds and private equity firms shows that institutional investors are mobilising capital towards investments that will deliver measurable positive impacts alongside financial returns. Despite data constraints posing the biggest barrier to ESG integration, especially in tackling financial risks posed by climate change, institutional investors are nevertheless incorporating ESG, notably in their portfolio management and investment decisions.
The assets under management (AUM) of Europe-domiciled funds that include “absolute return” in their name declined by EUR6.1 billion (USD6.6 billion) during the first seven months of 2023, reinforcing suggestions that the strategy is in an ongoing decline, according to research from Cerulli Associates.
Fund managers are failing to provide appropriate liquidity management with many demonstrating a lack of care to investors. Gill Wadsworth talks to Patric Foley-Brickley, Managing Director, Apex FundRock UK, about how the industry can raise standards.
By Jeffrey Palma, head of multi-asset solutions and John Muth, macro
strategist at Cohen & Steers
© 2022 Institutional Asset Manager
