Socially Responsible Institutional Investment in Private Equity

Posted: 25 Oct 2006 Last revised: 10 Sep 2008

See all articles by Douglas J. Cumming

Douglas J. Cumming

Florida Atlantic University

Sofia Johan

Florida Atlantic University - Finance; Tilburg Law and Economics Center (TILEC)

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Abstract

This paper studies institutional investor allocations to the socially responsible asset class. We propose two elements influence socially responsible institutional investment in private equity: internal organizational structure, and internationalization. We study socially responsible investments from Dutch institutional investments into private equity funds, and compare socially responsible investment across different asset classes and different types of institutional investors (banks, insurance companies and pension funds). The data indicate socially responsible investment in private equity is 40-50% more common when the decision to implement such an investment plan is centralised with a single Chief Investment Officer. Socially responsible investment in private equity is also more common among institutional investors with a greater international investment focus, and less common among fund-of-fund private equity investments.

Keywords: Socially Responsible Investment; International Institutional Investment, Private Equity

JEL Classification: G20, G30

Suggested Citation

Cumming, Douglas J. and Johan, Sofia A., Socially Responsible Institutional Investment in Private Equity. Journal of Business Ethics, Vol. 75, pp. 395-416, 2007. Available at SSRN: https://ssrn.com/abstract=940026

Douglas J. Cumming (Contact Author)

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Sofia A. Johan

Florida Atlantic University - Finance ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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