PwC’s report explores the size and dynamics of the market, ESG product strategies, data sources and the preparation of ESG reporting and audit. 14 participants were alternative investment fund managers (AIFM), 8 were Ucits mancos and 29 were super mancos, representing a total of 15 different nationalities.
“This survey, which was conducted at the time ManCos were updating their pre-contractual documents and commitments to comply with the Level II of SFDR, provides unique insights on how these new requirements have been implemented by Luxembourg ManCos,” said Geoffroy Marcassoli, audit partner and ESG audit leader at PwC Luxembourg.
Delano took a deep dive into the report--here are some key figures and insights related to sustainability.
86% of respondents manage at least one article 8 fund
The report found that 86% of respondents manage at least one article 8 fund (“light green” funds that promote environmental and/or social characteristics)--all of the Ucits mancos and super mancos manage at least one article 8 fund, but only 50% of AIFMs do so.
However, fewer participants manage at least one article 9 fund (“dark green” funds that have a sustainable investment objective). 36% of AIFMs, 37% of Ucits mancos and 69% of super mancos manage at least one article 9 fund.
Majority have plans to upgrade funds
Most mancos are planning to upgrade at least one fund from article 6 to article 8, found the report. A much smaller proportion of participants, however, plan to upgrade funds from article 8 to article 9.
45% of respondents say they plan to upgrade between 5% and 15% of their article 6 funds to article 8 funds in the year to come, 28% say that they plan to upgrade up to 5% of their funds from article 6 to article 8, and 17% say they plan to upgrade between 15% and 25% of their funds.
None of the AIFMs surveyed by PwC are planning to downgrade funds, but 33% of Ucits mancos say they plan to downgrade at least one fund from article 9 to article 8, as do 16% of super mancos.
70% of Ucits commited to making sustainable investments
The report also found that 70% of article 8 Ucits and 43% of AIFs are committed to making sustainable investments, as per the SFDR.
Where do mancos get their ESG data?
59% of respondents use one or two ESG data providers, 13% use three data providers while 28% of respondents use four or more ESG data providers.
Principal adverse impact indicators
According to the report, 81% of mancos that manage Ucits article 9 funds consider at least all mandatory principal adverse impact (PAI) indicators, which aim to show how certain investments pose sustainability risks. But this figure drops to 45% for Ucits with article 8 funds.
PwC’s report also found that 58% of respondents prepare their SFDR periodic reporting in-house, 20% delegate to a service provider and 22% do both.
Find the full report here.