Institutional Investors, Alternative Asset Managers, and ESG Preferences

Joseph A. McCahery, Paul C. Pudschedl, Martin Steindl

2022 | Academic | Alternatives, Investor Behavior, Portfolio Reporting

We find that limited partners (LPs) are motivated to incorporate ESG because they believe that ESG usage is more strongly correlated with financial performance. We find that general partners (GPs) are motivated to integrate ESG factors into their investment strategies in response to increased client demand for sustainable products.