fund economics

Momentum is gathering behind the movement to link carried interest to impact or ESG targets. In the second part of this deep dive, we discover that it is easier said than done.

Could this be the next frontier in tying ESG targets to financial incentives in private funds?

A trickle of fund managers choosing to link carried interest to their impact and ESG targets is good news for private markets, showing the industry is serious about its sustainability goals.

The GP says it will not receive 50% of its carried interest if it fails to meet new fund’s impact goals, which will be verified by an independent third party.

Emerging manager Trill Impact, led by Jan Ståhlberg, aims to 'contribute to a better world and inspire others to follow'.

The energy transition-focused fund manager has deployed roughly 60% of Infragreen IV and plans to launch Fund V, for which it will link carried interest to ESG objectives, next spring.

European fund manager Capza will link loan costs and its own carried interest to ESG KPIs for its sixth private debt fund, says managing director Laurent Benard.