PE fundraising has bandwidth to accommodate ESG-related regulation

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Sachin Vankalas, general manager of the Luxembourg Finance Labelling Agency (LuxFLAG), which certifies funds’ ESG credentials, says ESG is playing an increasingly prominent role in the PE space:

“The capital deployed via PE has the potential to have much more impact compared to investments in listed equities. Because PE holdings typically involve significant equity stakes in portfolio companies and board representation, GPs know their portfolio companies better and can influence underlying ESG strategies. Holding periods are also longer in many cases which is very compatible with sustainable investing.”

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