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Golding Capital Partners

PRI reporting framework 2020

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

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories (Private)


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          US mezzanine manager with an initial Golding ESG assessment below peers
        
Conducted by
Asset class
Scope and process

The US manager is a respected and trusted long-term partner of us and we have committed to several fund generations of the manager over the past two decades. When we completed our ESG assessment during due diligence, we realized that the manager had obvious room for improvement and was lacking the ESG processes and organization of some of its peers.

Outcomes

As mentioned in SAM 04.2, we expect and encourage our investment managers to improve over time. 

As such it was natural for us to confront our long-term partner with the outcome of our ESG assessment during due diligence. The manager had several areas worthy of improvement and we identified several "low hanging fruits" with them that could easily be improved (e.g. policy, reporting). Following an initial discussion, they asked us for help in their efforts to upgrade their ESG organization and policy and we now look forward to supporting them once they have concluded their fundraiser and freed-up managerial capacity in 2020.

Topic or issue
          Emerging Iberian infrastructure manager with high ESG ambitions (but all work in progress)
        
Conducted by
Asset class
Scope and process

The newly formed Iberian manager was about to raise its first time fund and voiced a high commitment to ESG during due diligence. Hence, we had to confirm our initial assessment and that we would not fall victim to mere rhetorics.

Outcomes

As part of the due diligence, we sat down with them to get a better understanding and greater insights to what they intended to achieve and also how they intended to achieve becoming a leading investment firm with best in class ESG processes in place. Based on the good discussions held with them, we ultimately got comfortable with their plans, committed to their fund and are now pleasantly following them as they deliver on their promises (e.g. they significantly upgraded their ESG policy and were successfully approved as signatory to the UN PRI in Q1 2020).

Topic or issue
          US private equity manager acknowleding, but outsourcing ESG
        
Conducted by
Asset class
Scope and process

Established buyout investor in the US that acknowledged ESG as an important differentiator in the lower middle market, but that outsourced most of ESG-related acitivities to an external advisor. Hence, we decided to have an informed discussion with them reassuring them on the benefits of working with an external knowledgable party, but also stressing the importance of forming their own holistic ESG view and the necessity to promote sustainable investing not just to the outside world.

Outcomes

As part of the due diligence, we sat down with them to get a better understanding of their present view on ESG and ended up having an encouraging discussion about what best in class peers in the industry were doing (benefit/drawbacks of insourcing/outsourcing, regular training of the investment team, exclusion/inclusion criteria, ESG KPIs, etc.).

Based on the lively discussion held, the manager renewed its commitment to improving its ESG practices going forward, based on which we derived sufficient comfort to start a business relationship with them and commit to their fund.

09.2. Additional information.


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