In advance of the event, Delano spoke with Olivia Tournier-Demal, head of the Luxembourg office and conducting officer at MJ Hudson. She speaks on Tuesday’s “Sustainable PE: a value-driven approach in building and managing portfolio companies” panel.
Aaron Grunwald: What do you want the audience to get most from the “Sustainable PE” panel?
Olivia Tournier-Demal: I hope the audience will gain a deeper appreciation of the importance of sustainable investing and pick up some useful ideas that they can implement in their own portfolios. I would be happy if each audience member were to take at least one concrete ESG action after hearing the panel.
What are some of the best examples of PE managers incorporating ESG aspects into their investment analysis, decision-making and monitoring that you’ve seen this year, either at your own firm and another?
While there are some standout examples, the more important trend is that all firms are now taking these issues very seriously and it is very difficult to find a website in the industry that does not have an ESG policy. The progress made in the last couple of years has been truly encouraging. Most of the due diligence we see nowadays include ESG criteria, with more or less weight in the overall investment rating. At MJ Hudson, in our capacity as third party AIFM, we check that these criteria are actually monitored. This is part of our compliance and risk review. Governance in the investment process is a must-have in our onboarding process, and usually naturally implemented by our clients.
As simple and concrete examples, I could mention a real estate manager I am familiar with, which includes the lowest possible environmental footprint in all of its RFPs for refurbishment projects; or a traditional PE house I know, which has enshrined the number of staff positions maintained in its portfolio companies as a key performance indicator.
From your perspective, would EU rules on ESG criteria help or hurt the PE fund sector?
I think that ESG will be most effective if the practitioners themselves, rather than regulators have control. Ultimately, the investors will make the rules here. Unfortunately, sometimes you need regulations to shake people’s thinking, of course. In the ESG sphere, urgent action is required, so I expect the EU legislator to set the goals and I expect that regulators will let practitioners determine the best route.
Aside from your own talk at the ALFI event, which speech or panel are you most looking forward to hearing, and why?
Well, there are so many interesting sessions, it’s difficult to pick one out. I am very interested to hear Michael Jackson from Mangrove talk about the change that is coming for private equity and venture capital. We see a new era of asset management before us and I am interested to hear his views. I will also try to follow the proptech panel, where I expect to learn some new tech tips and, of course, I will listen with utmost attention to Mr Zwick on substance and oversight, which are key to MJ Hudson.