Are Private Equity funds ESG and Transparency compliant more likely to raise more capital?

Abstract

As the three letters E, S, and G resonate increasingly within the field of finance, sustainable finance and its ecological and economic impact have become prominent topics of discussion. Examining the integration of these new standards and trends within a thriving sector that has experienced remarkable growth and achieved record-breaking performance over the years could have significant implications for the future. This dissertation aims to provide a comprehensive analysis, ranging from a literature review that illuminates the advancements in the field up to the present, to a quantitative analysis that seeks to identify future trends. The central question that drives our research is: ARE PRIVATE EQUITY FUNDS ESG AND TRANSPARENCY COMPLIANT MORE LIKELY TO RAISE MORE CAPITAL? Through the exploration of various hypotheses, our study will investigate the importance of General Partners' (GP) expertise, the impact of past performance on the launch of new funds, and the emergence of ESG-oriented funds. We will approach this analysis from multiple angles, examining the disparities between the US and EU and assessing the behavioral shifts of industry participants following the 2015 Paris agreements. Throughout this dissertation, we strive for both precision and nuance, leaving no avenue unexplored in order to provide you with a comprehensive understanding. We hope that you find this work informative and engaging.