Reputation, crisis, management

Insight from PEI's Responsible Investment Forum; what PE can do about its 'bad guy' reputation.

Responsible Investment: With hand sanitizers stationed at every table, sister title Private Equity International kicked off its fourth annual Responsible Investment Forum last week.

It was clear at the event that more and more industry professionals no longer consider environmental, social and governance reporting an option; climate change is a crisis, and many investors, especially those with long investment horizons, realize it. But employing and reporting on ESG impact can do more than just appease ESG-conscious investors …

Here, Connor Hussey gives us a glimpse of what attendees think of ESG and what it offers to the industry.

Crisis managers: Private Equity International’s cover story in March, offered here, is a deep dive into the industry’s role as the “bad guy” of finance, exploring the barrage of criticism it has received thus far and offering a glimpse of a way forward. It’s a must-read. As it happens, private equity – which has been in the hot seat for the past 12 months – may have just been handed an ideal opportunity to prove its worth to society. For one thing, it’s known for keeping a cool head in a crisis (read: insulated to some degree, at least temporarily, from the public markets roller coaster). The argument should go: PE firm management expertise plus that insulation gives portfolio companies more breathing room to figure out how to cope with the possibility that their entire workforce may end up housebound for a period.

This may be the industry’s chance to illustrate how they aren’t just good at managing companies – they’re specialists in crisis management. If private equity-backed companies come through this better than their public markets counterparts, that’s a pretty strong validation of the ownership model.

Email prepared by Connor Hussey, Isobel Markham and Graham Bippart