Will Hedge Funds Ever Truly Embrace ESG Principles?
Markets across the alternatives industry are abuzz with talk of ESG, none more so than hedge funds where the topic is far from clear cut. For some, considering ESG within the context of hedge funds may appear contradictory: hedge funds use a variety of instruments to generate an absolute return across a range of markets and asset classes, so why constrain these investments with ESG policies? Will the limitations outweigh the benefits?
Preqin surveyed hedge fund managers and investors to gauge their opinion on ESG. We learned which LPs and GPs already have an ESG policy in place, which do not and which are aiming to implement one. While the majority of both hedge fund managers and investors do not have a policy in place, 29% and 20% respectively already do, and a further 20% and 15% are planning to implement one in 2019. What effect will these policies have on the shape of the hedge fund industry – not only for the rest of 2019, but five years from now?