Zagga joins UN-backed Global Principles of Responsible Investing to advance sustainability in real estate private credit

Specialist real estate private credit investment manager, Zagga, has reinforced its commitment to responsible investment by becoming a signatory to the UN-backed Principles of Responsible Investing (PRI).

The PRI is the world’s leading advocate for responsible investment. Joining its global network formalises Zagga’s commitment to embedding environment, social, and governance (ESG) considerations across investment and operational decision-making and practices.

Nikki Kemp, Singapore-based independent chair of Zagga’s ESG committee, director of Singapore Green Finance Centre, and former World Economic Forum executive, said this was an important milestone signalling Zagga’s determination to integrate ESG at every level.

“We’re pleased to be recognised as a PRI signatory,” Kemp said. “This affirms Zagga’s commitment to responsible investment practices, and reflects its belief that responsible investment considerations are essential to managing risk and delivering sustainable returns for investors. “Just as alternative assets have become more mainstream, ESG has moved from the periphery to the core of responsible investing. ESG is not just about doing good, it is proven to improve investment outcomes.”

PRI signatories commit to six core principles, incorporating sustainability-related factors into investment analysis and decision making through to disclosures and reporting. David Atkin, CEO of PRI, welcomed Zagga’s decision, noting it reflects the growing number of investment managers aligning with global responsible investment standards.

”We are delighted to welcome Zagga on board as a signatory to the PRI. Incorporating sustainability-related factors into analysis allows investors to gain sight of additional credit risk throughout the deal cycle, allowing them to make better-informed decisions and enhance long-term value.

“Zagga’s commitment to responsible investment reflects a growing recognition of the importance of such analysis across all asset classes, and we look forward to working with them in the future.”

Growth with responsibility

Australia’s private credit market has experienced significant growth and is now valued at AUD 205 billion ($135.1 billion), with approximately 17% [~AUD 85 billion ($56 billion)] allocated to commercial real estate loans.

Zagga is one of a growing number of private credit managers to formalise its commitment to responsible investing, helping to raise the standard across the sector and reflecting the rising demand from wholesale and institutional investors for greater ESG alignment across alternative asset classes.

Alan Greenstein, Zagga CEO and co-founder, said PRI signatory status underscores Zagga’s commitment to best practice.

“Private credit has become a core part of well-diversified portfolios as investors look to diversify risk away from public markets, bolster portfolio resilience, and secure stable, attractive income amidst increasing global volatility,” Greenstein said.

“With growth comes responsibility. As an investor-first business, ESG is no longer a ‘nice to have’ but a must to ensure we deliver for the global investors who entrust us with their capital. We look forward to collaborating with other investment leaders, across asset classes
and geographies, in the PRI community.”

Zagga established its independent ESG Advisory Committee in 2023, which is mandated to advise and oversee the integration of ESG considerations into Zagga’s investment and operational practices.

Its commitment to PRI closely follows Zagga’s cross-border growth, strengthening its offering and on-the-ground footprint in Singapore in response to growing demand from ASEAN investors for Australian real estate private credit investment opportunities.

Since originating its first loan in 2017, Zagga has invested in excess of AUD 2.5 billion ($1.6 billion) across more than 300 transactions in the Australian commercial real estate sector, returning over AUD 1.5 billion ($989.2 million) to its global investor base across more than 200 successful exits.

Re-disseminated by  Wealth and Society