This report shows public data only. Is this your organisation? If so, login here to view your full report.

Portobello Capital

PRI reporting framework 2019

You are in Direct – Private Equity » Pre-investment (selection)

Pre-investment (selection)

PE 05. Incorporating ESG issues when selecting investments

05.1. During due-diligence indicate if your organisation typically incorporates ESG issues when selecting private equity investments.

05.2. Describe your organisation's approach to incorporating ESG issues in private equity investment selection.

Portobello Capital works to incorporate ESG principles at all levels/stages during the investment and management process of the portfolio companies where we invest in:

1. Pre- Due Diligence Stage:

Before going into the Due Diligence process, the Investment Team makes sure that the company being analysed does not operate in sectors which are deemed to be unethical or are excluded according to our own investment criteria, in which case such investment would be therefore banned.

2. Due Diligence Stage:

ESG related research is an essential requirement in our initial screening process. Portobello has included in its internal investment process the need of social and environmental due diligences to be made. As the rest of the analyses made thought the investment decision process, the potential ESG issues of a company will considerably affect the decision of the Investment Team on whether to or not carry out an investment.

Environmental, social, corporate and legal compliance due diligences are performed on most of our investments by external advisors. The outcome of such studies in some cases recommended certain actions in order to comply with local regulations, environmental directives or conservation parameters. These recommendations are a priority issue during the first 100 days after the acquisition of the company.

3. Investment Period:

Implementation responsibilities correspond to the Partners and Investment Directors that are directly involved in the management and control of each of the corresponding Portfolio companies. ESG items will be discussed also in the Board meetings of the portfolio companies, seeking the alignment of interests and providing support to the management teams in implementing the measures. Additionally, annual questionnaires filled in by the companies will allow us to identify whether the improvement in environmental performance is taking place.

Twice a year, the Portfolio Review Committee of the Managing Company reviews the ESG issues in all companies of the Funds' portfolio.

Additionally, the Board of each company controls annually the evolution and implementation of measures in each portfolio company.

4. Divestment Stage:

We believe that a good management of ESG aspects will have an impact on the return obtained and at the same time we work trying to ensure that the standards already acquired during the investment period are maintained after being sold. We try to make sure that the buyer of our companies signs a "Best Efforts" letter with regards to these practices. 

These are some  examples on how Portobello Capital approaches some of the ESG issues:

Environmental:

An environmental Due Diligence becomes critical if the analysed company carries out any type of industrial activity that involves waste:

In several cases, the outcome of such studies recommended certain actions in order to comply with local regulations, environmental directives or conservation parameters. These recommendations are a priority issue during the first 100 days after the acquisition of the company.

As an example, Portobello analysed an add-on to our ice cream producer company. Findings in the environmental due diligence were relevant and led to a better understanding of the company and the way it was managed by the owners. The decision was to withdraw from the acquisition process.

Social:

We monitor and verify the supply chain of our portfolio companies (when relevant). These companies request from their suppliers warranties or certificates stating that their businesses support and respect the protection of internationally proclaimed human rights.

05.3. Additional information. [Optional]


PE 06. Types of ESG information considered in investment selection

06.1. Indicate what type of ESG information your organisation typically considers during your private equity investment selection process.

06.2. Describe how this information is reported to, considered and documented by the Investment Committee or similar.

Information will be included in the discussions hold by the Investment Committee and later on, included in the minutes of the meeting.


PE 07. Encouraging improvements in investees (Private)


PE 08. ESG issues impact in selection process (Private)


Top