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Exponent LLP

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

          Disclosure on ESG issues

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Exponent’s investment strategy has been to focus on identifying and developing investment opportunities in businesses with strong market positions, where there has been evidence of historical constraints and there is the potential to transform through multiple market-independent levers. Exponent applies this strategy, which has been developed by Exponent over many years, in the buy-outs and buy-ins of companies operating in the upper end of the mid-market.  These companies are typically headquartered in the United Kingdom of Great Britain and Northern Ireland (the “UK”) and the Republic of Ireland (“Ireland”).

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Exponent is committed to developing, enhancing and promoting Responsible Investment (“RI”) principles across all aspects of its business and has had an active RI policy since 2010. The policy has been revised three times since its inception and is now reviewed annually and approved by Exponent’s board of Partners and disseminated to the team. We are continuously reviewing how best to implement our ESG policy and in the last two years have improved this process by: (i)  including ESG as part of our onboarding programme for new employees, (ii) commenced annual ESG training  and (iii) included ESG within our Annual Declarations, that the whole team sign.

Exponent considers Responsible Investment to be an approach to both investing in and owning businesses that incorporates Environmental, Social and Governance (“ESG”) factors. It is the Partners’ view that managing RI proactively and addressing ESG issues and opportunities can have a positive impact on the performance of the investments in our portfolio. The Firm is a committed signatory to the PRI and has integrated the PRI’s 6 principles into its Responsible Investment policy.

Since its formation in 2004, Exponent has developed a strong and well-defined culture that promotes a clear personal responsibility on each member of staff to set the standards against which the Firm should be judged, including those related to Responsible Investment. In all aspects of business and personal dealings, members of staff should never say or do anything that they are not prepared to explain and defend to any external audience, however constituted. In terms of RI, the Firm seeks to approach this in three ways, as follows:

Exclusions: The Limited Partnership Agreements (“LPAs”) and Side Letters for each Fund have the effect of restricting investments in certain sectors by providing investors excuse rights with respect to those sectors and/or requiring the relevant Funds’ Advisory Committee to consent to an investment in such sectors. Examples would include the armaments industry, pornography, animal testing and businesses employing forced labour. A fuller (but not exhaustive) schedule can be found below. Most importantly, Exponent needs to bring judgement to bear on potential investments which are not in sectors that are formally prohibited, but which in Exponent’s view, carry unacceptable reputational risk to the Firm and its investors.

Exponent prohibits investments in the following sectors, where businesses are principally engaged in the following activities:

  • The development, production or sale of any biological, chemical or nuclear weapons, cluster bombs or anti-personnel mines;
  • The carrying out of illegal logging;
  • The manufacturing, sale or marketing of weapons, artillery and ammunition to be used in the act of war or military conflict;
  • Incitement of violence or racial hatred;
  • Pornography and vice;
  • Animal testing, live exports or the fur trade;
  • Activities which constitute a material violation of locally applicable environmental laws or regulations; or
  • Activities employing forced or child labour.

Note that careful consideration also needs to be given to businesses principally engaged in:

  • Gambling;
  • Tobacco; or
  • Nuclear power generation or the production, handling or reprocessing of nuclear fuels.

Themes: The Firm’s investment approach is bottom up, not top down and accordingly it is not in the investors’ interests for the Firm to limit its activities to particular fields. Exponent does however bring the same investment criteria to bear on each of the investments that it considers ensuring a common standard is applied across the portfolio as a whole.

Integration: The challenge is to think broadly about how ESG factors (issues and opportunities) apply to each of the situations that Exponent considers. An aide memoire of the factors that the Firm may consider is set out below:


  • Air and water pollution
  • Biodiversity
  • Climate change
  • Deforestation
  • Ecosystem services
  • Energy efficiency
  • Hazardous materials
  • Land degradation
  • Resource depletion
  • Waste management
  • Water scarcity


  • Customer satisfaction
  • Data protection and privacy
  • Diversity and equal opportunities
  • Employee attraction and retention
  • Employee engagement
  • Government and community relations
  • Human capital management
  • Human rights
  • Labour standards
  • Labour-management relations
  • Marketing communications
  • Product mis-selling
  • Product safety and liability
  • Supply chain management


  • Accounting standards
  • Anti-competitive behaviour
  • Audit committee structure
  • Board composition
  • Bribery and corruption
  • Business ethics
  • Compliance
  • Executive remuneration
  • Lobbying
  • Political contributions
  • Risk management
  • Separation of Chairman and CEO
  • Stakeholder dialogue
  • Succession planning
  • Whistle-blower schemes

01.6. Additional information [Optional].


SG 01 CC. Climate risk (Private)

SG 02. Publicly available RI policy or guidance documents


02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.




02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.






02.3. Additional information [Optional].

The above policy elements can be found in the Firm's 2019 Responsible Investment Policy which is available to download on the Firm's 'Responsibility' page (URL provided). The website also hosts the Firm's 2018 ESG report which explains the Firm's ESG policy and processess in greater detail. . 

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

As a regulated Firm we are obligated to manage conflicts of interest fairly and accordingly have the appropriate policies and procedures in place to manage and mitigate any potential conflicts.  The Firm's Limited Partnership Agreements also set out, for each fund, the requirement to disclose any unavoidable conflicts to ensure that investors are sufficiently protected.

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios (Private)