ESG

Consumer and employee attitudes towards environmental and social issues are having a growing impact on private equity’s approach to value creation.

From talent to tech, thinking through future scenarios can help private equity firms identify areas that require attention and investment today, explain EY’s Andres Saenz and Pete Witte.

Being at the forefront of ESG and technology and data best practices will be increasingly vital for value creation, as well as attracting talent and capital at the fund level, says RSM’s Ben Gibbons.

Nimble data systems can help managers keep pace with regulatory, tech and operational developments while they focus on growing their portfolios, says IHS Markit’s Dalen Chow.

Managers need to ensure funds are structured in jurisdictions offering both stability and substance, say Elliot Refson and Philip Pirecki at Jersey Finance, the representative body for the island’s finance industry.

Private equity has changed significantly in the 30-plus years that Clayton, Dubilier & Rice chairman Donald Gogel has been in the industry but, he explains, the critical ingredients for outperformance remain the same.

Seeding and GP-stakes platforms that target diverse managers are a step in the right direction.

Representatives Maxine Waters of California and Joyce Beatty of Ohio included the two big private equity players among a list of 31 investment managers who received the letter.

The PE heavyweight’s GP platform, which aims to back the next-generation of diverse managers, will provide both seed capital and working capital of more than a year to its GPs.