Moonfare, a digital investment platform for top-tier private markets funds, has signed the Principles for Responsible Investment (PRI), the United Nations–supported organisation with over 4,000 signatories worldwide.
PRI signatories commit to responsible investment principles that provide a framework for integrating environmental, social and governance (ESG) factors into their decision-making processes.
“With the growth of our assets under management at Moonfare, we will continuously redouble our focus on the responsibility that comes with managing these large sums,” says Moonfare founder and CEO Steffen Pauls. “Signing the PRI allows us to once again underscore our commitment to backing managers who hold themselves to the highest standards.”
Across the private equity industry, investors are increasingly seeing ESG as a lever for driving returns. Considering ESG factors upstream can help future-proof investments that may face increasingly tight regulatory environments before their holding period has elapsed.
According to Pitchbook’s “2020 Sustainable Investment Survey,” 95 per cent of private equity fund investors already evaluate ESG risk factors within their investment process or will be increasing their focus on ESG risk factors.
This focus on ESG is especially strong in Europe, where investors in private equity funds have allocated the most capital — USD190 billion, as of June 2020 — using responsible and sustainable criteria like the PRI, according to a Bain & Company analysis of Preqin data.
Moonfare will first and foremost implement the PRI framework within its fund-selection process, which assesses different private markets funds across key areas like persistence of returns, rigour of the team’s
deal filter and integration of ESG standards through both target selection and operational value creation at portfolio companies. Fund managers’ implementation of responsible investment principles will continue to be a key factor in Moonfare’s fund selection process.
“Sustainability and the integration of ESG principles help form the core of our investment philosophy at Moonfare,” says Moonfare Investment Director Sweta Chattopadhyay, who leads sustainability topics from within the Moonfare investment team. “It is something our clients care deeply about and, as long-term investors in private markets, we tend to share their view. We believe that this approach also ultimately leads to better risk-adjusted returns for our portfolio.”
“We are very pleased to welcome Moonfare as a PRI signatory,” PRI CEO Fiona Reynolds says. “In joining PRI, Moonfare commits to considering ESG factors in its investment and ownership decisions. We look forward to working with the team.”
Many of the fund managers whose strategies Moonfare has offered on its platform have signed the UNPRI, including KKR, EQT, Permira, Apax Partners, Genstar, AlpInvest Partners, Glendower Capital, Cinven, Lexington Partners and Oakley Capital.