Interested in Verger’s view on how ESG is evolving in the alternative investment space? Join Jim Dunn, CEO and Co-CIO, as he describes Verger’s ESG approach and reasons why ESG can be particularly important in alternative investments.
For the recent 2022 EY Global Alternative Fund Symposium Jim Dunn shared the virtual stage with Meredith Jones, Executive Director of Financial Accounting Advisory Services at Ernst & Young LLP. This event featured experts from across the alternative investment field and EY Wealth & Asset Management leaders.
A recording of Jim’s interview, along with other on demand content from EY will be available here until December 31, 2022.
Some of our Favorite Takeaways From Jim Include:
- That Verger needs to think “like a vampire” and consider its investment portfolio with a perpetual, or immortal, time horizon.
- For our investment process, our ESG approach is like yoga, “it’s a practice – there’s always room for improvement and we get better the more we do it.”
- Verger’s quick piece of advice for investors and asset managers looking to incorporate ESG into their investment approach: “Start with your ‘Why.’ Your mission, core values, culture – make sure it’s all solid first before exploring the ESG landscape.”
Key Points Regarding Verger’s ESG Approach and Why it Matters in the Alternatives Space
- Jim points out that Verger has been very purposeful in exploring its own ESG approach at the firm or business level, starting with appointing an ESG Task Force of industry experts.
- He explains that Verger’s work to formalize our ESG policies and procedures continues to help us ask our investment managers better operational due diligence questions.
- Jim notes that asking about ESG risks and opportunities as part of the investment due diligence process can be especially important for in alternatives, given long lock up periods.
- Similarly, ongoing engagement is even more important, given the long-term partnerships we share with alternatives managers.
- Meredith agrees, and points out that in the alternatives space Venture Capital, Private Equity, and Real Estate managers are quite close to their end investments, and therefore can have a profound impact on ESG outcomes.
Looking at the Future of Alternatives
In thinking about how the landscape in the alternatives space might change over the next 1 – 3 years, Jim walks through a few key themes to watch:
Expanded access to diverse managers
Jim points out Institutional Allocators for Diversity, Equity & Inclusion (IADEI) as an example of an organization working to make this a reality. Their goal is to direct capital towards diverse fund managers and bring firms like Verger ideas that normally wouldn’t be on our radar screen.
Jim also highlights HBCUvc, whose goal is building the next generation of innovators and entrepreneurs from Black and historically excluded communities. Verger announced its partnership with HBCUvc in 2021 and became a sponsor.
Coalescing global ESG accounting and reporting standards
Jim points out that there’s global momentum towards standardization here, and managers who want to stay ahead of the curve will be watching this closely. While most of the activity to-date has been in public markets, Jim notes that this is likely to spread to private markets relatively quickly.
Thank you to the EY team for featuring Verger and for making this recording available for our network of investment, client, and industry peers.