Institutional Asset Manager Newsletter 24.02.23

Positive ESG effort

All power to the fund management sector’s ESG elbow this week.
First news that real estate fund managers are the driving force in improving property’s environmental impact.
Research from Deepki the ESG data intelligence firm, shows that almost half (44 per cent) of UK real estate management professionals believe fund managers have "the greatest influence when it comes to improving the ESG credentials of commercial real estate", ahead of occupiers (42 per cent), and their employees (36 per cent).
Katie Whipp, head of UK at Deepki, tells us that as real estate portfolios with poor carbon footprints take a battering – the majority of respondents say that at least some of their asset values have been affected by brown discounting – fund managers are incentivised to take action.
She adds; "They have seen the capital and rental values of green assets increase by 16–25 per cent because occupiers are prepared to pay a premium for buildings which are energy efficient and provide an environment which supports the health and well-being of employees."
Meanwhile research from American Century Investments shows a marked increase in appetite for impact investing.
The asset manager’s senior vice president and head of sustainable investing, Sarah Bratton Hughes, says the survey shows more interest in investments that make a demonstrably positive difference "from men and women, baby boomers, Gen Xers and millennials".
"Even the populations whose interest lags other populations’ interest are making gains. This isn’t surprising, because the long-term drivers for sustainable investing remain strong, and that reaches all populations."
This comes despite the recent anti-ESG movement – largely driven by republican politicians in the US – which Bratton-Hughes says has failed to derail sustainable investments.
"Despite a challenging global economy, an evolving regulatory environment, and political pushback over the last year, interest in sustainable investing not only endures, but has grown in most places."
Elsewhere, we got an update from US investment bank Cowen – winner in the IAM Service Provider awards - which became one of the first Wall Street firms to offer trade execution in digital assets for institutional investors.
Cowen Digital, offer institutional investors access to leading tokens through a high touch desk, and has expanded its operation considerably since launch in March 2022.
And while the crypto winter, alongside dramatic failures of significant players including FTX, have made "life interesting" Cowen’s founders remain optimistic that a strengthened regulatory environment will reassure investors of the long-term security of using digital assets.
Cowen Digital founders Drew Forman and Eric Rose, explain: "The events of the last few months, especially the collapse of FTX, have been painful for affected investors and other firms damaged by the fall-out. We believe, however, that the ultimate result will be beneficial for the industry in the long-term. This turmoil has highlighted aspects of the market infrastructure and regulatory framework that needed to be improved."
Gill Wadsworth, Editor

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