Sustainable Investing |Emerging Markets

• Sustainable investing is an umbrella term for four distinct investment strategies which share the objectives of reducing exposure to non-sustainable activities and increasing exposure to sustainable activities. 

• Of these four strategies, Impact investing seeks to achieve investors’ risk and return objectives through investing in assets which will, over the holding period, create positive social and/or environmental outcomes.

• We see such broad-based interest in having sustainable ideas integrated into portfolio management from the owners of capital across many regions of the World that we believe sustainable investing is a growing trend, not a fad.

• So much so that we believe that in the not too distant future capital markets will move from a paradigm of risk-adjusted returns to one of risk-adjusted and sustainability-optimized returns.

You can download our note “Pricing Impact” which explains our ideas on impact investing.

• Emerging markets have grown rapidly from 20% of global GDP in 2000 to 40% in 2019.

• At this scale we think the question is how to obtain exposure, not if. 

• Private Equity in emerging markets has developed from virtual non-existence to an established industry which attracted 23% of global private equity funds raised in 2018.

• Private Equity in emerging markets has better coverage of the faster-growing consumer-facing sectors than listed markets.

• Compared to developed market private equity, private equity in emerging markets makes much less use of leverage and financial engineering and is much more focused on helping companies to grow.