A better, cheaper world

Standardized ESG means cheaper finance; seven reasons firms are outsourcing fund admin; Blue Wolf update.

Standardize ESG data, access cheaper finance. Practices for measuring and reporting the environmental, social and governance performance of portfolio companies are still all over the place, as we concluded in our in-depth report in December. And various third-party ESG scoring systems are – say colleagues on sister title Infrastructure Investor – still nascent and limited. S&P became the first conventional ratings agency to get into ESG evaluation during 2019, and we expect more to follow. Why? Because increasingly the cost of debt capital will be linked to measurable ESG performance, says this article by corporate finance lawyer Neil Caddy.

Fund admin. From sister publication Buyouts Insider, and published here, the top seven reasons why US private equity firms are finally outsourcing their fund admin. One of the perhaps less-talked-about reasons is the high number of spin-outs in recent years. The number of PE funds in the States is at an all-time high, but some have concluded that this is in large part due to the fact that founders have been resistant to letting go of the reins. Small, emerging firms have an obvious need to outsource fund admin – it gets expensive to pay all those salaries.

Blue Wolf. In case you missed the story on Tuesday, here we have a bit more detail about Blue Wolf’s recent creation, and filling, of a COO role.

Email prepared by Graham Bippart