Whilst MV Credit invests across the capital structure, most of our funds are focused on Senior (e.g. TLB, FRN) and Subordinated lending (e.g. second Lien, PIK, preferred equity). As such, our ESG strategy development has been characterised by our non-active ownership of the underlying assets we invest in.
Since inception, MV Credit has always operated with an informal and formal investment exclusion criterion. Initially the informal aspect was driven by the managers personal investment philosophy (ethical and moral exclusions); whilst the formal criteria included further specific requests from our LPs; which were formally included in our fund documentation [See more on questions FI 04.2 and SG 01.4].
Through gradually formalising our ESG practices (e.g. becoming a UN PRI signatory in 2012 – then under CapVest) we have reached a point in our development where we currently incorporate a three step ESG / RI evaluation of prospective investments. We (i) screen potential investments through a negative/exclusionary and norms-based strategy, (ii) seek further support/ validation of ESG values through a deeper Due Diligence Assessment (integration strategies), and (iii) our findings are presented and vindicated at the investment committee / Board level.