05 December 2023

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A recent report by PERE highlights a shift in the real estate investment sector: investors are integrating environmental performance into their compensation structures. During the PERE Network America Forum 2023, representatives from Ivanhoé Cambridge and Bouwinvest revealed that they have already structured some of their fund investments to reflect this new strategy and are actively seeking more opportunities to do so. 

Bert van den Hoek of Bouwinvest elaborated on this strategy, explaining: “We have implemented some alignment with managers through ESG KPIs that are ultimately another hurdle to earning the promote. With alpha performance on ESG, the promote can be increased. But with underperformance on the ESG KPIs, the promote will be decreased.” 

This approach, as van den Hoek pointed out, is also about aligning with like-minded partners who share a commitment to rigorous ESG standards and practices. “If you align yourself with partners who are willing to put themselves through empirical analysis, that’s when you really align yourself with people who have the same philosophy and stand by those commitments themselves.” 

To learn more about how Ivanhoé Cambridge and Bouwinvest are applying these green incentives, read the full article on PERE.