ESG is an important part of our overall due diligence process and information on the target funds' ESG policies is collected as part of the due diligence questionnaire that target fund managers complete at our request. Whilst we prefer funds that have strong ESG policies, the quality of a fund's ESG policies will not form the basis of our decision alone.
In addition to reviewing a fund's ESG policies, we will also consider how it incorporates these policies into the fund strategy, how it reports its ESG strategy to its investors, what relevant laws and regulations impact the fund, and any sustainability initiatives the fund is already participating in. This information is then incorporated into the investment decision making process.
We ensure that ESG forms part of our due diligence process for multi-manager strategies, as detailed above, because we recognize the value of proactive and positive ESG policies. The benefits of these may include: limiting the risk of regulatory non-compliance, maintaining properties' competitive position in the market, increasing the appeal of a property to tenants and purchasers, and in some cases, reducing expenses and improving returns.
The majority of our fund of funds have implemented ESG policies, are signatories to the UN's Principles for Responsible Investment and participate in the GRESB survey (Global Real Estate Sustainability Benchmark). GRESB is an industry-driven organization committed to assessing the sustainability performance of real estate portfolios around the globe. The benchmark is used by institutional investors to engage with their investments, with the aim of improving the sustainability performance of their investment portfolio, and the global property sector at large. GRESB was founded in 2009 and is increasingly the measure of choice for investors into unlisted funds.