Unrivaled solution marks significant advancement for performance analysis of sustainability funds

LONDON, April 11, 2024 (GLOBE NEWSWIRE) — Preqin, the global leader in alternative assets data, tools, and insights, today announced the launch of its ESG fund performance benchmarks. These pioneering additions to Preqin’s suite of global benchmark solutions are market-first. For the first time, clients are empowered to benchmark environmental, social and governance (ESG) fund performance within the context of the wider private markets*, seeking to introduce better standards around performance analysis. These ESG benchmarks are not only looking at ESG funds, but also SFDR, Impact, Climate funds and more. 

With improved means of assessing performance, through different tools and comprehensive data, investment professionals can now drive meaningful performance analysis and make informed investment decisions when it comes to ESG and impact investing. Investors will be able to benchmark quality funds and fund managers as part of their sustainability strategy. Conversely, fund managers can benchmark ESG fund performance and articulate, with confidence, their performance outlook and ESG credentials back to investors. Meanwhile, advisors may unlock the latest ESG market intelligence, in a timely manner, and share important information with their customers regarding new market opportunities and challenges.

This latest offering from Preqin is a response to there being a lack of standardized and comparable ESG fund performance data, which has been a contributing factor leading to an increase in anti-ESG sentiment and criticism in recent years. The alternative markets are famously opaque, as private firms do not have the regulatory duty to disclose such details. And yet, in an ever-evolving landscape, investors, fund managers and advisors need to equip themselves with robust tools and reliable data to make informed decisions when it comes to ESG and impact investing. Access to these enhanced tools is a means of championing transparency in markets where ESG data is scarce and difficult to collate, helping to establish more widely accepted standards. The promotion of consistent standards can alleviate concerns when it comes to the industry’s differing applications and opinions of ESG.

By utilizing the ESG fund performance benchmarks, clients can comprehensively analyze the performance of ESG-labelled funds with other ESG or non-ESG funds, and deep dive into over 200 ESG fund performance benchmarks, covering more than 1000 ESG funds, including SFDR funds. This expansive coverage encompasses ESG fund labels across the main private market asset classes (private equity, venture capital, real estate, private debt, natural resources and infrastructure). The labels are: ESG integration, Impact, Climate, SFDR Article 8, SFDR Article 9, Sustainable Development Goals (SDG) and Sharia Compliant.

The ESG fund performance benchmarks herald the latest offering from Preqin’s fund performance benchmarks that have been recognized by a third party as the market leader**. Preqin has been ensuring reliable data accuracy with over 100,000 customizable alternatives benchmarks across more than 13,500 private capital funds. These benchmarks offer a heightened level of assurance to clients stemming from both, the dedicated research team, who ensure the best coverage with the robustness and timeliness of the data in the market, as well as the variety of data sourcing channels. On this, there are over 500 investment research analysts who collect and curate data from various sources, including: Freedom of Information Act (FOIA), fund manager voluntary contributions, listed firm financial reports, public filings, annual reports, and aggregated and anonymized performance data sourced directly from fund manager quarterly reports to investors.

Jaclyn Bouchard, EVP, Head of ESG Solutions & Corporate Responsibility at Preqin, said, “At Preqin, we look to empower anyone who invests in, allocates to or advises on ESG in Alternatives. Through our benchmark offering, we aim to unleash the power of data to increase transparency around the performance of ESG funds to enable more opportunities for capital to flow to sustainable investments.”

Fabien Chen, SVP, Head of Benchmarks, at Preqin, added, “With this latest launch, we hope to give practitioners another tool to help them to understand whether ESG funds outperform the market or their non-ESG peers. As we expand and innovate on our benchmark offerings, we will bring further transparency and objectivity to enhance decision making and accountability in the private markets.”

Notes to the editors

* Private capital excludes hedge funds

** Probitas Partners’ 2024 Institutional Investors Private Equity Survey December 2023

To learn more about Preqin ESG benchmarks, click here.

To learn more about Preqin Benchmarks, click here.

To learn more about the data for press stories or for more information, contact Mimi Celeste Taylor on [email protected]

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About Preqin 

Preqin, the Home of Alternatives, empowers financial professionals who invest in or allocate to alternatives with essential data and insight to make confident decisions. It supports them throughout the entire investment lifecycle with critical information and leading analytics solutions. The company has pioneered rigorous methods of collecting private data for 20 years, enabling more than 200,000 professionals globally to streamline how they raise capital, source deals and investments, understand performance, and stay informed. For more information visit www.preqin.com.