Private Advisors has developed specialized due diligence tools to address the unique underwriting requirements in Low Mid Market private equity that include ESG considerations during the underlying private equity manager selection and monitoring processes. In addition to offering a screened investment vehicle, the Hedge Fund team is now adopting the application of ESG considerations in its investment activities, building on the process developed by the Private Equity team in 2012, as described below.
Private Advisors believes it is a leader among its peers in its development of a proprieraty Private Equity ESG Due Diligence Manual, an ESG Due Diligence Scorecard and an Operational Due Diligence program that address the unique underwriting requirements of lower middle market private equity managers in North America. This includes the identification of ESG risks considerations and value drivers at the underlying portfolio company level, governance practices at the underlying fund level that are underwritten by both the Private Advisor investment teams and ODD teams, and governance practices with our funds, including the use of third part reporting providers. This ESG Scorecard evaluates private equity fund investments on up to 35 different criteria and has been used programatically since 2015. In addition, the Operational Due Diligence Scorecard has been completed for every investment since 2012.
Private Advisors, as mentioned above, uses an ESG Scorecard as part of its investment due diligence, which is shared with all members of the Primaries Investment Team . In addition, Operational Due Diligence conducts separate checks on firms’ governance, regulatory compliance, and controls. The findings from the ESG Scorecard and ODD team are also summarized in the final investment memo for approval by the Investment Committee.