The Private Markets component is set to grow within investors’ asset allocation. As a result, an increasingly large section of the portfolio is not assessable from an ESG perspective.
To address this situation, the Nummus.Info team developed a proprietary model for analysing Private Markets investments in 2021.
This new model expresses an ESG assessment on Private Equity/Debt, Venture Capital, Infrastructure, Real Estate products.
The output of the model is represented by a numerical score. Following the same methodology as for the liquid portfolio component (if already available), we have identified intervals to translate the score into a literal rating (ESG rating). At the end of the process, the manager and all stakeholders receive an overall assessment of the sustainability of their portfolio according to a scale of values.
Already applied to a sample of 120+ products, the model has achieved a high degree of output diversification, demonstrating that it is able to discern between a ‘sustainable’ product and one with low ESG characteristics.
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