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.
David E Wilton
David is an experienced investor with an exceptional track record in investing with a double-bottom-line and successfully pioneering investment programs in Sustainable Investing (including SRI, Thematic, ESG and Impact) and Emerging Market Private Equity.
Prior to forming Zheng Partners David was Managing Director and Head of Sustainable Investing at Morgan Stanley Alternative Investment Partners where he created the Integro Impact Fund which as of December 2018 had a gross IRR of 18.8% over the three years since its first close and job growth of 12% CAGR.
Before joining Morgan Stanley David was Chief Investment Officer and Manager, Global Private Equity for the International Finance Corporation. David was the initial Manager of the Funds Group at its inception in 2000. At the time he left IFC in 2014 the funds’ portfolio was generating a net IRR of 19.3% since 2000 and job growth in the portfolio was running at over 15% CAGR.
While at IFC David was also Acting CEO of the IFC Asset Management Company during its establishment phase and a member of the Pension Finance Committee of the World Bank Group, with oversight of the management of the World Bank Pension Fund.
David was a member of the G8 Working Group on Impact Investing and Chairman of the Advisory Board of the Emerging Market Private Equity Association