News & Initiatives

The Standards Board for Alternative Investments (SBAI) has published a memo on co-investments which was developed by the Standards Board’s Governance Working Group. The Standard Board’s Co-investment memo sets out the processes investment managers need to put in place to address key governance and compliance challenges that can arise when granting investors the right to co-invest. The memo also covers structuring considerations and issues in relation to fee, expense and cost allocation. Jessica Ross, Head of Customized Investments at Albourne Partners, said: “The best way for managers to address conflicts of interest and risks that can arise through co-investments is to adopt a co-investment policy which establishes procedures addressing the entire process from the allocation decision all the way through to the liquidation of the co-investment. The memo sets out these process steps, including suitability assessment of the co-investments opportunity, an investor eligibility framework, structuring considerations and the allocation/disposal approach.” Currently, the Governance Working Group is reviewing a number of other topics, including investment manager committee structures and fund Director conflicts of interest. The findings of these reviews will be published in the coming months as part of the SBAI Toolbox.

Albourne continues to see increased demand from investors for ESG integration in the investment process, however there are issues that both fund managers and investors face when integrating ESG in their processes. Albourne has integrated a review of managers ESG capabilities in its Operational Due Diligence with the aim to provide an overview of their ESG capabilities, thus complimenting the investment, operational and quantitative due diligence that Albourne already completes on funds. The significant issue for fund managers continues to be accessibility to objective standard material ESG information on the investment universe. Please watch the below Albourne film on the aspirations and challenges of ESG reporting, covering the following key areas: Why Albourne views that the integration of ESG data into investment decisions is key. What can be done to make it easier for managers to integrate ESG data into their investment processes. The need for a standardized reporting framework for ESG data from corporates. Albourne believes that the future of ESG data provision requires a standardized framework, allowing for simple collection collation and comparison, similar to the creation of the Open Protocol reporting of a fund’s risk exposures. The ability for fund managers to factor in all information that is relevant and material to an investment, is the key to any investment strategy. Albourne is looking to work with others in the investment industry that are focused on providing a solution to this problem.