Over the last few years, we have seen investors increasing their allocations to both private markets and sustainable investment strategies as they look for ways to prepare their portfolios for the future.


We don’t see private markets and sustainability as distinct but complementary strategies within an investment portfolio. By considering the two, we think investors can make more informed choices with respect to their long-term strategy, potentially enhancing returns whilst minimizing the downside. We believe that private markets are a natural home for sustainability strategies, owing to the typically longer hold periods and greater degree of involvement, which underlying fund managers have in their portfolio companies.

Sustainability is one of our core investment beliefs

We believe a sustainable investment approach is more likely to create and preserve long-term investment capital and more specifically that:


  1. Environmental, Social and Corporate Governance (ESG) factors can have a material impact on long-term risk and return outcomes and should be integrated into the investment process.
  2. Taking a broader and longer-term perspective on risk, including identifying sustainability themes and trends, is likely to lead to improved risk management and new investment opportunities.
  3. Climate change poses a systemic risk, and investors should consider the potential financial impacts of both the associated transition to a low-carbon economy and the physical impacts of different climate outcomes.
  4. Stewardship helps the realization of long-term shareholder value by providing investors with an opportunity to enhance the value of companies and markets.


Introducing Mercer's sustainable opportunities private markets solution

Many investor face difficulties when seeking to implement to sustainable investments through private markets. In response, we have developed our own sustainable opportunities portfolio to provide access to a diversified range of highly rated managers across the full range of environmental and social themes, asset classes and geographies. 


The portfolio seeks to deliver strong risk-adjusted returns from the targeted opportunity set of investments expected to benefit from the global shift towards a lower carbon economy and the need to address resource scarcity issues. The portfolio seeks exposure to environmental and social themes, which broadly align with a number of global standards including the UN Sustainable Development Goals.

Portfolio core investment themes

Measure against 5 UN Sustainable Development Goals






Key characteristics of the solution

The strategy focuses on infrastructure (typically a renewable energy but also other types of sustainable infrastructure) and private equity (typically buy out, growth and venture capital). However, is also encompasses sustainable real estate (e.g. affordable housing), natural resources (e.g. timber and agriculture) as well as private debt. The strategy focuses on developed markets but can also allocate to other regions given the nature of the opportunity set in sustainable investing. The structured approach to portfolio construction is another characteristic feature of our proven investment strategy. We aim for optimal diversification across risk/return profiles, investment styles, vintage years, regions, sectors and types of investment, as well as managers and individual assets.

~10 fund positions

via Primaries and Secondaries,
excluding Co-Investments


Private Markets Portfolio with a Sustainability Theme

Target Return

7-10% p.a.


* Only sustainability focused strategies


Investment Type


All target allocations or returns and projected portfolio diversifications are for informational purposes only.  There is no guarantee that the Fund will be able to implement its investment strategy and attain the allocations, returns, or diversifications presented.

  • Our experience and credentials


    Why Mercer for your private markets portfolio



    Global Alternatives Assets Under Advisement*

    Private Markets        ~$124bn

    Hedge Funds             ~$55bn   



    Global Alternatives Assets Under Management*

    Private Markets        ~$15bn

    Hedge Funds             ~$7bn   


    25 years

    Private Markets experience


    15 years

    Track record managing
    Hedge Fund portfolios


    25 offices




    Global Alternatives professionals**

    Private markets        ~150

    Hedge Funds            ~50

    *  Assets Under Management and Assets Under Advisement as of December 31, 2019. Please see Important Notices for important information about Assets under Management and Assets under Advisement. Private markets assets based on committed capital. Hedge funds and other alternative assets based on Net Asset Value (NAV). Dollar amounts in USD. Excludes fee compliance assets. Due to rounding, totals provided may not precisely reflect the absolute figures.

    **  As of January 31, 2021; excludes administrative personnel.  


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