b'ILPA PRIVATE MARKETS EDGE Q1 202114 15Investors Going Beyond UnderstandingInvestor Interest Rising in Funds Dealing TOP OF MIND ESG Integration to Action With All Aspects of Climate ChangeTheglobalCOVID-19healthpandemichasplacedaClimate Change is a unique global challenge in terms spotlight on the urgent need for society to address theof scale, urgency, magnitude and complexity of action. SustainableDevelopmentGoalsforbothconsumersThe effects of Climate Change are immediate, complex andinvestors.Ontheconsumptionside,thereisaandsevere.Investmentsininitiativesfocusedinthis heightenedawarenessanddemandformoresociallyareaincludingthosefundsfocusedonadaptation and environmentally responsible products, services andand resilience - will continue to grow as more LPs are business practices. On the investor side, there will becommittedtoalignmentwiththegoalsoftheParis increased pressure to allocate capital towards sustainableAgreement and net zero investments. strategies. At MassMutual we are actively incorporating Elizabeth Tirone, Deputy Chief Legal Officer, Fundssustainability, diversity and inclusion in our investment and Capital Partnerships, CDC Group Plcanalysisandunderwriting.Additionally,MassMutual has also launched new initiatives investing both human resourcesandcapitalinminorityentrepreneursand managers. Rilwan Meeran, Portfolio Manager, Impact Investments, Investment Management, MassMutualMedium to Long-Term Impacts From theGPs Will Move Heaven and Earth to Pandemic Are Not Yet Fully Priced In Deliver Liquidity to LPs (and Lock in Carry) Disappearing Status Quo Options in GP- Anticipating Stronger Norms Around Cross-2021willmarkour5thanniversaryintermsofourI anticipate that distributions will hold steady or increase.led Deals Pose a Challenge for LPs Fund Deals and Continuation Fundsinvestmentpushintoprivateequity.GiventhatourGPs will move heaven and earth (i.e., do dividend recaps)Thesetransactionswillcontinuetogrowin2021,asThe ever-growing proliferation of cross-fund deals and portfolio is just starting to mature and given that equityinordertomakedistributionsbecausetheIRRmathGPsincreasinglywanttoholdontotheirwinnersforcontinuation funds, in their various forms, has become a prices are at quite elevated levels, I do expect and amdrivesthemtoreturncapitalsoonerratherthanlater.longer especially in a highly competitive environment forhot topic for LPs. We are beginning to see something of a greatly looking forward to seeing strong and robust exitThey are laser-focused on their carried interest and wontsourcing new deals. Unfortunately, we are hearing thatframework around what is best practice and how LPs and activity even if we see some correction from current levelsletCOVIDgetintheway.Withrespecttovaluations,some GPs want to do away with the status quo optionGPs can be appropriately aligned take shape. I think by in the equity markets. At the same time, I am worriedwewillseeawiderrangethanusual.Someportfoliofor LPs that allows LPs to roll their investment into thethe end of this year there will be much clearer boundaries about valuations. I fear that investments priced too muchcompanieswilldieonthevine,whileotherswillseecontinuation fund. If that movement gains momentum, itaround what is palatable, and therefore accepted by LPs, to perfection in terms of their growth projections may notacceleration in value. COVID is likely to result in greaterwould be a significant degradation of LP rights. and also when GPs are clearly being seen to push the turn out to be great investments down the road.disparity between winners and losers.envelope too far.Anonymous LP, Portfolio Manager, North AmericanHideya Sadanaga, Senior Managing Director, Head of Monte Tarbox, Executive Director, Investments, Insurance CompanyDelaney Brown, Head of Funds and Secondaries, Private Equity Investments, Japan Post BankNational Electrical Benefit FundCPPIB'