With increasing investor interest in how asset managers manage Environmental, Social and Governance (ESG) issues rightly at the forefront of client focus, the European Secured Loans Team have analysed how ESG ‘compliant’ portfolios might compare with non-ESG portfolios in the European syndicated leveraged loan market.

Traditional ESG rating and research providers such as MSCI and Sustainalytics have historically not offered much coverage of the largely private loan market in Europe, hence any ESG mandates are more likely to be customised segregated accounts or manager-defined pooled funds reflecting bespoke preferences of ESG definitions. We believe that ESG investing is gaining importance, but with the different approaches to ESG we do not expect a ‘one-size-fits-all’ approach.