CONTRIBUTORS
Prash Odhavji
Impact Investment
Franklin Templeton Global Private Equity
Key takeaways
If 2023 was the year to prepare and commit, then 2024 is the year to execute and accelerate.
We enter 2024 with strong tailwinds, supported most recently by COP28 discussions that have paved the way for significant improvement across developed and emerging economies. Franklin Templeton’s observations at COP28 were positive.
Most notably we saw clear commitment and action from both public and private stakeholders to accelerate climate positive policies and solutions.
What will be critical in the year ahead is how these agreements can be mobilized and how private sector capital can augment progress made in the public sphere.
This paper reviews sectors including energy transition, agrifood, policy and catalysts.
Private equity impact investment is set for further growth in the year ahead, buoyed by more positive deal economics, supportive policy and an improving cost curve that will accelerate adoption globally.
Initiatives such as Climate Action 100+ and the Net Zero Asset Manager—note that Franklin Templeton is a signatory to both agreements—are also making headway in galvanizing the industry to take action on climate change.
WHAT ARE THE RISKS?
All investments involve risks, including possible loss of principal.
An investment in private securities (such as private equity or private credit) or vehicles which invest in them, should be viewed as illiquid and may require a long-term commitment with no certainty of return. The value of and return on such investments will vary due to, among other things, changes in market rates of interest, general economic conditions, economic conditions in particular industries, the condition of financial markets and the financial condition of the issuers of the investments. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor's ability to dispose of them at a favorable time or price. Past performance does not guarantee future results.
International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.
There are special risks associated with investments in China, Hong Kong and Taiwan, including less liquidity, expropriation, confiscatory taxation, international trade tensions, nationalization, and exchange control regulations and rapid inflation, all of which can negatively impact the fund. Investments in Taiwan could be adversely affected by its political and economic relationship with China.
Franklin Templeton and our Specialist Investment Managers have certain environmental, social and governance (ESG) goals or capabilities; however, not all strategies are managed to “ESG” oriented objectives.
Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.
The views expressed are those of the authors and do not necessarily represent the views of Franklin Templeton Investments or the individual specialist investment managers at Franklin Templeton.