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Signage is displayed at the entrance to BlackRock Inc. headquarters in New York


Jeenah Moon/Bloomberg


Deutsche Bank

upgraded BlackRock and Eaton Vance shares to a Buy, citing “powerful” demand for sustainable investing that could bring a tide of cash to the asset-management companies,

Asset growth at both firms can average “5% or better,” beating their peers, the bank said. That would allow both stocks to trade at premiums to the asset-management group, according to Deutsche analysts led by Brian Bedell.

Asset managers “have an opportunity to substantially enhance organic growth” by developing products focused on offering a positive impact in terms of ESG, or environmental, social and governance factors, Deutsche Bank wrote. Many asset managers have been embedding ESG into their investment processes, it said, but strategies specifically focused on ESG are doing far better at attracting assets.

That trend is expected to continue “given rising awareness of ESG issues globally and the greater importance younger generations place on investing for ESG impact,” the bank said. This year, growth in sustainable investing jumped as concern over climate change mounted and the Covid-19 pandemic highlighted the importance of social issues, it said.

According to one survey from Federated Hermes Investors, nearly two-thirds of respondents now consider social factors as part of their investment process.

In the past, one hurdle for ESG investing was a perception that such funds underperform relative to others, or that investing with a social purpose would violate fiduciary responsibility. That has been the position of the Labor Department, which is weighing an unpopular proposal to curb ESG options in 401(k) retirement plans.

Those concerns are unfounded, Deutsche Bank suggested, because investors don’t appear to be sacrificing performance by buying ESG funds. Funds not explicitly identified as ESG, but ranked as highly sustainable by Morningstar, also

AEA-Bridges Impact Corp., a blank check company formed by AEA Investors and Bridges Fund Management targeting impact and ESG businesses, raised $400 million by offering 40 million units at $10. Each unit consists of one share of common stock and one-half of a warrant, exercisable at $11.50.

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The company is led by Co-CEO and Chairman John Garcia, who joined AEA Investors in 1999 and currently serves as the firm’s Executive Chairman, and Co-CEO and Director Michele Giddens, the co-founder and Co-CEO of Bridges Fund Management.

The company plans to target businesses that align with its impact-driven investment focus and provide attractive risk-adjusted returns, seeking to set and enact strategies which maximize the lockstep between financial growth and impact delivery, and operate and create value through support of a strong impact and ESG profile or a transition toward best-in-class impact management practices.

AEA-Bridges Impact Corp. plans to list on the NYSE under the symbol IMPX.U. Credit Suisse and Citi acted as joint bookrunners on the deal.

The article Impact and ESG SPAC AEA-Bridges Impact Corp. prices $400 million IPO at $10 originally appeared on IPO investment manager Renaissance Capital’s web site renaissancecapital.com.

Investment Disclosure: The information and opinions expressed herein were prepared by Renaissance Capital’s research analysts and do not constitute an offer to buy or sell any security. Renaissance Capital’s Renaissance IPO ETF (symbol: IPO), Renaissance International ETF (symbol: IPOS), or separately managed institutional accounts may have investments in securities of companies mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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As ESG investing has proliferated in recent years, so have the number of standards, definitions and strategies, resulting in a confusing morass that hamstrings sustainable investors.

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That’s according to the Organisation for Economic Co-operation and Development, which said in its annual business and finance outlook, published on Tuesday, that while consideration of environmental, social and governance issues is rapidly “becoming a part of mainstream finance,” there is “little common understanding” on “what the goals of ESG investing are or should be.” While most investors seek to incorporate ESG factors to better manage risks and improve returns, they lack the tools needed to do this efficiently, including consistent data, comparable metrics and transparent methodologies, the OECD said.

Sustainable investing has grown rapidly in recent years, with more than $30 trillion of assets worldwide now incorporating some level of ESG consideration. Investors have piled into ESG because they’re under pressure from clients, employees and the public to contribute to a fairer and greener society, and because there’s a growing recognition that “non-financial ESG risks can have a material impact on risk-adjusted returns,” the OECD said, singling out the coronavirus as a case in point.

“The Covid‐19 pandemic has highlighted an urgent need to consider resilience in finance, both in the financial system itself and in the role played by capital and investors in making economic and social systems more dynamic and able to withstand external shocks,” the OECD said. The report “is a call to action for governments and market participants to make ESG investing fairer, more transparent and more efficient.”

ESG data, which tracks companies’ performance on everything from carbon emissions to the diversity of their