The Journal of Alternative Investments: Hedge Funds: Resolving Myths about ESG Integration
NEPC’s Dulari Pancholi‘s research paper was recently published in the Fall 2022 edition of The Journal of Alternative Investments. Her research examines the top misconceptions about ESG integration in hopes to clear a path for increased adoption in the hedge fund investment management process. View the article on The Journal of Alternative Investment’s site here.
Abstract
Despite the widespread acceptance of the ESG concept, its adoption by the hedge fund industry has been relatively slower than in other asset classes. A series of misconceptions and myths seems to hinder the conviction level in the hedge fund universe. This article examines the top misconceptions about ESG integration and hopefully clears a path for increased adoption in the hedge fund investment management process. It argues that ESG integration can be adopted in all hedge fund strategies and provides meaningful benefits to both hedge funds and their clients. By incorporating ESG considerations early in the initial underwriting process, a hedge fund manager can potentially improve the future risk-adjusted return for the fund without necessarily creating a social tilt in the portfolio. Importantly, senior leadership should champion its firm-wide adoption by being intentionally strategic about the time commitment and resource allocation.
Click here to read her full article on The Journal of Alternative Investment’s website.
by Dulari Pancholi, CFA, CAIA Principal, Head of Credit and Multi-Asset Investments
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