- Advertisement -
- Advertisement -

Related

Are Hedge Funds Embracing ESG Investing?

Latest Report

- Advertisement -

Stockholm (HedgeNordic) – Almost two-in-five hedge fund managers currently consider environmental, social and governance (ESG) factors in their stock selection process, according to a survey conducted by hedge fund index provider BarclayHedge. Among those considering ESG factors, 52 percent of their assets are currently allocated based on ESG ratings.

According to the Barclay Hedge Fund Manager Survey, which collected 70 responses from hedge fund professionals between June 24 and July 11, 58 percent of next year’s allocations are expected to be based on ESG measures. On average, about 42 percent of last year’s asset allocations were based on ESG ratings. “The trend is consistent with reports that ESG investing grew at record levels during this year’s first quarter,” wrote BarclayHedge.

Around 62 percent of the hedge fund managers employing ESG factors in their stock selection process said they use ESG ratings to screen candidates for both long and short positions. Almost one-in-three managers (38.5 percent) use ESG considerations merely to screen candidates for the long portfolio. No respondents use ESG factors solely to screen candidates for short positions.

Of the three elements of ESG, hedge fund managers overwhelmingly focus on the governance factor in their stock selection process. Of the 70 hedge fund professionals surveyed, 56 percent selected governance as the most important element of ESG in identifying long positions. About 61 percent rely on that factor to identify short positions. In the process of identifying short positions, 28 percent of respondents said they weight the environmental element most heavily, while 11 percent said social sustainability was their top consideration. The focus on the “E” factor is lower when considering long candidates at 19 percent.

“The increasing role of ESG ratings among the survey participants isn’t surprising,” said Sol Waksman, the president of BarclayHedge, in news release accompanying the quarterly survey. “Several factors are converging that are driving the trend,” one of which is “an increased interest among managers in social impact investing,” said Waksman. “There’s also a growing recognition of the link between governance and performance,” Waksman said, adding that “finally, the growing awareness of how human activity causes climate change has led investors to place greater importance on trying to reduce the impacts of the most egregious activities.”

 

Photo by Zbynek Burival on Unsplash

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Playing ‘Moneyball’ for Investors

Having managed the opportunistic hedge fund Pensum Global Opportunities under the Pensum Asset Management umbrella since 2022, Sector co-founder Peter Andersland has now established...

One Big Winner Lifts Accendo Into the Top Ten

When your portfolio holds six names, one big winner can move the needle in a major way. For Accendo Capital, September proved just that....

Slim Nordic Line-Up at HFM Awards

With Intelligence has revealed the shortlist for the HFM European Performance Awards 2025, featuring an unusually small number of Nordic hedge funds among this...

Record Gold, Rising Momentum

The NHX CTA Index gained in September 2025, supported by a broad-based trend environment. Most of the profits came from precious metals, as gold...

From Rocky Starts to Solid Returns and Milestones

Lynx Asset Management, best known for its flagship trend-following program Lynx, has in recent years expanded its product offering with the launch of Lynx...

Europe’s Infrastructure Transformation: Where the Smart Money is Going

Infrastructure is at the heart of Europe’s economic transformation. Richard Marshall, Head of Infrastructure Research at DWS, explores how subsectors like data centres, renewable...

Allocator Interviews

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -
HedgeNordic
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.