Schroders

In the wake of COP27, the "just transition" to a green economy must put people at its centre, says Maria Teresa Zappia, deputy chief executive officer at BlueOrchard, and head of sustainability and impact at Schroders Capital.

New research by Schroders Capital suggests that past performance could be more instructive for some parts of the private equity (PE) market than others.

The latest release of Schroders’ flagship Institutional Investor Study shows just how quickly the approaches to sustainable investing have evolved in the Asia Pacific (APAC) region. In short, institutional investors are moving beyond simple exclusionary and integration approaches to incorporating active ownership, measuring impact and setting net zero targets.

Optimism for commercial real estate in the region is strong. The $200 billion-plus record investment in 2021 has the potential to grow by 10% this year, despite external risks, with allocations to alternative assets such as multi-family apartments, data centres and medical facilities increasingly appealing, says Andrew Moore, head of real estate, Asia Pacific, Schroders Capital.

Even amid the turmoil of the global pandemic, private equity (PE) attracted capital inflows. Both 2020 and 2021 were strong years in performance. Why, when investors face so many challenges, has PE stayed so robust, ask Schroders’ experts.

With sustainability so integral to allocation decisions for asset owners across Asia, what is the value of 'natural capital' to portfolios? Schroders believes that understanding - and embracing - this amid the ongoing changes to the climate, physical environment and biodiversity is key to avoiding nature-related financial risks.

As more multi-asset portfolios integrate sustainability, such portfolios’ ability to navigate short-term swings in performance is enhanced without sacrificing longer term returns, says Schroders’ Jason Yu. In this Beyond Profit series, the firm explores both investing in sustainability-driven sectors and incorporating ESG considerations in the investment process.

Asian equity investors need to identify businesses that embrace sustainability, engage well with stakeholders while effectively positioning for growth from Asia’s emerging, long-term structural shifts. Stephen Kam of Schroders shares how.

Local knowledge in the region’s diverse real estate markets will enable investors to pivot between defensive and offensive strategies to tap opportunities despite uncertainty, says Andrew Moore, head of real estate, Asia Pacific, Schroders Capital.

The long-term success of Asian sustainable bonds requires greater disclosure and impact measurement. Angus Hui of Schroders shares how effectively quantifying sustainability will take the asset class to the next level.

Although sustainable funds have seen increasing inflows amid growing environmental awareness and the spotlight on social issues due to Covid-19, the industry still lacks a standard definition of sustainable investing. Nicholette MacDonald-Brown, head of European blend equities at Schroders, explains the firm’s three-pronged approach of people, process and purpose.

Institutional investors still believe private asset investing comes with extra challenges, but that the diversification and return benefits make it worth their while. A recent Schroders survey identifies notable increases in interest for real estate debt, infrastructure equity and insurance-linked securities.