There is a growing expectation among institutional investors that fund managers develop and disclose their approaches to responsible investments (RI), according to the Responsible Investment Policy Framework (Framework) recently issued by the Standards Board for Alternative Investments (SBAI), an association of alternative investment managers. The Framework discusses the fundamental considerations for developing an approach to RI and the key components of RI policies in four principal areas, including responsible integration; asset selection; ownership and voting; and corporate and market citizenship. “Allocators want to ensure that, when a manager is using RI approaches within its products, the approach has been carefully considered, is appropriately resourced and is governed effectively,” SBAI content/research director Maria Long told the Hedge Fund Law Report. This article, the first in a two-part series, explains how to use the Framework, identifies five approaches to RI in general and discusses four approaches to incorporating RI principles into investment strategies, with additional insights from Long. The second article
will analyze governance, disclosure and measurement, as well as three key considerations for fund managers. For more from SBAI, see our two-part series “Guidance on Conflicts, Valuation and Structuring for Private Credit Fund Managers and Investors”: Part One
(Aug. 6, 2020); and Part Two
(Aug. 13, 2020).