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Golding Capital Partners

PRI reporting framework 2020

You are in Indirect – Manager Selection, Appointment and Monitoring » Appointment

Appointment

SAM 04. Appointment processes (listed equity/fixed income)

04.1. Indicate if in the majority of cases and where the structure of the product allows, your organisation does any of the following as part of the manager appointment and/or commitment process

04.2. Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.

Asset class

Benchmark

          Private debt programs are benchmarked against the usual debt indices (e.g. S&P leveraged loan index) as well as our existing portfolio.

While we do not set ESG specific benchmarks for our managers to stand up to, we continue to be positively surprised that more and more GPs have either already assumed or are in early stages to assume more responsibility (even historically lagging managers in the US). This is evidenced by the fact that we get more and more questions on best practices from the managers' respective competition and segment in general.
        

ESG Objectives

          Golding expects the portfolio funds and investments to acknowledge ESG principles, integrate these issues in its investment decisions and report on its ESG performance to investors (formalized/safeguarded by side-letter clauses that we negotiate with every GP ahead of our commitment).
        
          We expect our partners to not just pay great lip service, but integrate ESG-related aspects into their processes and organization.
        
          We encourage all our partners to promote responsible investment with stakeholders and within their sphere of operations.
        
          We expect and encourage our investment managers to improve over time. As part of our overall ESG assessment in line with our proprietary framework, our investment professionals take notes on highlights, opportunities for improvement and recommendations to the GP. These findings are then integrated in every investment committee paper and addressed with the GP within reasonable time.
        
          We encourage our partners to join an initiative, i.a. to formalize their commitment.
        

Incentives and controls

Reporting requirements

Benchmark

          Private equity programs are benchmarked against the common available benchmarks (e.g. Preqin) as well as our existing portfolio.

While we do not set ESG specific benchmarks for our managers to stand up to, we continue to be positively surprised that ESG considerations are increasingly common in the private equity industry (especially in Europe). This is evidenced by the fact that we get more and more questions on best practices from the managers' respective competition and segment in general (even from historically lagging managers in the US).
        

ESG Objectives

          Golding expects the portfolio funds and investments to acknowledge ESG principles, integrate these issues in its investment decisions and report on its ESG performance to investors (formalized/safeguarded by side-letter clauses that we negotiate with every GP ahead of our commitment).
        
          We expect our partners to not just pay great lip service, but integrate ESG-related aspects into their processes and organization.
        
          We encourage all our partners to promote responsible investment with stakeholders and within their sphere of operations.
        
          We expect and encourage our investment managers to improve over time. As part of our overall ESG assessment and in line with our proprietary framework, our investment professionals take notes on highlights, opportunities for improvement and recommendations to the GP during due diligence. These findings are then integrated in every investment committee paper and addressed with the GP within reasonable time.
        
          We encourage our partners to join an initiative, i.a. to formalize their commitment.
        

Incentives and controls

Reporting requirements

Benchmark

          Infrastructure programs are benchmarked against the common available benchmarks (e.g. Preqin) as well as our existing portfolio.

While we do not set ESG specific benchmarks for our managers to stand up to, we continue to be positively surprised that ESG considerations are increasingly common in infrastructure investing internationally. More often than not, managers we are working with have a good understanding of ESG considerations and we are proud that a vast majority of managers in our infrastructure portfolio are also signatories to the UN PRI (and other iniatiatives).
        
          GRESB
        

ESG Objectives

          Golding expects the portfolio funds and investments to acknowledge ESG principles, integrate these issues in its investment decisions and report on its ESG performance to investors (formalized/safeguarded by side-letter clauses that we negotiate with every GP ahead of our commitment).
        
          We expect our partners to not just pay great lip service, but integrate ESG-related aspects into their processes and organization.
        
          We encourage all our partners to promote responsible investment with stakeholders and within their sphere of operations.
        
          We expect and encourage our investment managers to improve over time. As part of our overall ESG assessment and in line with our proprietary framework, our investment professionals take notes on highlights, opportunities for improvement and recommendations to the GP during due diligence. These findings are then integrated in every investment committee paper and addressed with the GP within reasonable time.
        
          We encourage our partners to join an initiative, i.a. to formalize their commitment.
        

Incentives and controls

Reporting requirements

04.3. Indicate which of these actions your organisation might take if any of the requirements are not met

04.4. Provide additional information relevant to your organisation`s appointment processes of external managers. [OPTIONAL]

          We discuss ESG aspects in meetings with investment managers also after the investment was made.

Whenever we encounter potentially adverse developments or receive meaningful information that would pose a potential conflict to the agreed upon responsible investment guidelines or to our own ESG policy, we strive to take immediate action and seek clarification. While the closed end nature of the funds we invest in certainly limits the set of actions/ sanctions we can take, we are not afraid to address our concerns vis-a-vis the investment managers and/ or the advisory board for resolution. If necessary, we will seek to engage with other investors to form a necessary coalition to be able to voice our concerns with meaningful impact. Certainly, we would not re-invest with a manager that has demonstrated to not adhere to the standards we deem important and, depending on the severity of the incident or wrongdoing, we may decide work towards decreasing our exposure near-term and to discontinue the business relationship completely.
        

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