How Hedge Funds Use Corporate Social Responsibility Considerations | Allaboutalpha: Alternative Investing Trends And Analysis | A Finance Blog About Private Equity, Commodities, And Other Alternative Asset Classes.
A new study by Jun Duanmu and three colleagues examines hedge fund use of matters of corporate social responsibility. The authors work from an asset-weighted composite measure of CSR by fund, in order to seek the difference in financial performance of those hedge funds with high CSR investment and those with low investment. They found no statistical difference in performance. That doesn’t imply that CSR is useless, though. Indeed, Duanmu and colleagues found that hedge funds increased their exposure to CSR investments after the global financial crisis. This timing is a valuable clue to where its utility lies.