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First Sentier Investors (including First State Investments)

PRI reporting framework 2016

Export Public Responses

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Fundraising of infrastructure funds

INF 06. Fund placement documents and RI

06.1. Indicate if your most recent fund placement documents (private placement memorandums (PPMs) or similar) refer to responsible investment aspects of your organisation.

06.2. Indicate how your fund placement documents (PPMs or similar) refer to the following responsible investment aspects of your organisation:

06.3. Describe how your organisation refers to responsible investment for infrastructure funds in fund placement documents (PPMs or similar). [Optional]

Our fund raising documents explicitly note our commitment to responsible investing. For example, including comments such as:

"…As long-term investors with substantial ownership in the companies we own, we focus on understanding the wider environment with which the investments operate in and on creating long-term, sustainable alpha. For example, as part of our internal assessment of environmental, social and governance ("ESG") risks and opportunities, we explored the impact of carbon regulation across all infrastructure sectors (including those we are not currently invested in).

The conclusions help us to deliver alpha through optimal portfolio construction (e.g. seek to increase exposure to sectors poised to benefit from carbon regulation and minimise exposure to those which may be risk-exposed). This 'top-down approach' dovetails with our active management expertise at the asset level."

Our fund raising documents also specifically note that we are a signatory to the United Nations Principles for Responsible Investment and seek to apply those principles in managing infrastructure businesses on a long term sustainable basis.

The documents also includes notes on our coverage of ESG risks and opportunities in:

  • Our investment and market research;
  • Our investment process, including the due diligence and investment appraisal for new investment opportunities, as well as in our active asset management for existing portfolio businesses.
  • 'Risks relating to investment' section of the PPM documents.

Potential investors or interested parties will also have access to our annual ESG report, which describes in detail our approach to responsible investment and ESG issues. The material includes our ESG policies and commitment to ESG implementation in our business and our investments. The information provided also includes membership details of ESG related organisations such as ISCA, LTIIA and the UN PRI.

In the PPM for European Direct Infrastructure Fund II, our approach and commitment to ESG is explained to in various sections of the document.

Please also refer to INF 04.1 for an explanation about our ESG approach and coverage.

06.5. Additional information. [Optional]

Our investors and prospective investors are increasingly focused on improving investment value through the appropriate consideration of ESG factors, including the exploitation of opportunity and appropriate mitigation of risks.

Our clients are also typically investors with a long-term investment horizon. This makes the consideration of ESG factors, which often have a similarly long-term outlook, an important part of their investment process. As such, highlighting our market-leading approach in the consideration of ESG factors is an important part of the fund-raising process.

INF 07. Formal commitments to RI

07.1. Indicate whether your organisation makes formal commitments in fund formation contracts, Limited Partnership Agreements (LPAs) or in side letters relating to responsible investment in infrastructure when requested by clients.

07.2. Additional information.

Please refer to section 04.1 for a full description of the organisation's approach to ESG matters.

In addition to section 07.1 we would like to note that whenever clients query or require inclusion of responsible investment detail in our agreements we are more than happy to clarify what our approach is and adjust that approach if the client has a specific request that does not contradict our existing policies. Given our approach is relatively advanced in the market place clients are usually comfortable with us leading the discussion and adding any additional client requirements onto our approach.

Our commitment to responsible investment is also embodied in the disclosure documents (e.g. Information Memorandum, Private Placement Memorandum) of the relevant Fund, or included in our formal responses to 'Requests for Proposal' for separately managed accounts or fund reviews etc.

In addition, we always assist and respond to ESG related enquires that our investors may have. Our ESG approach is included in the DDQ and data room. This is made available to potential and existing clients.