Private Market Insights IV/2023
Demand side needs regulatory stimulus
In theory, much is now possible within the existing regulatory framework with skilful handling and a certain level of effort. Going forward, however, investors need both incentives and a predictable regulatory environment to expand their allocation to sustainable investments and impact investments.
In his article, Dr Andreas Nilsson, Managing Director and Head of Impact Investments at Golding, describes the two cornerstones of the regulation of sustainable investment products and the demand side that needs regulatory stimulus.
The EU rules leave sufficient scope for innovative approaches and fund strategies to actively contribute to sustainable transformation – and for fund vehicles to be classified accordingly. One example of this is our private equity impact fund of funds, which is classified as a fund in accordance with Article 9 of the Disclosure Regulation, without an Article 9 classification necessarily having to apply to each individual portfolio fund within the fund of funds structure.
We believe that smart measures, such as capital requirements in banking regulation or sustainability accounting rules for insurers, could stimulate demand effectively in support of channelling capital towards sustainability objectives without spending billions of taxpayers’ money. The products are available. Now it’s up to the investors.
»Products Offer Plenty of Impact as Buyers Lack Reward Incentives«
by Dr Andreas Nilsson, Managing Director, Head of Impact Investments bei Golding, published in Private Equity Insight/Out in December.
