What can loan managers do to tackle ESG risks?
Investors’ growing focus on environmental, social & governance (ESG) issues raises challenges for the private European loan market. But Fiona Hagdrup, leveraged loans fund manager, says that lenders can exert significant influence.
The role of private equity
The European loan market is dominated by private equity-owned (PE) borrowers, with corporate deal-making (M&A) the single biggest driver of the market. According to Standard & Poor’s, the pile of uninvested cash held by PE sponsors is ‘bigger than at any point in the past decade’. And data provider Preqin put it at US$1 trillion at the end of 2017, of which c.US$630 billion is reserved for buyouts.
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