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Equistone Partners Europe

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

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.

We provide capital to support management buyouts in France, Germany, Switzerland and the UK. We have also invested selectively in Belgium, Luxembourg and the Netherlands. While most of our investments are buyouts, we also have a track record of supporting buy-ins, equity release, expansion capital and public-to-private deals.

Our target enterprise value range is between €50m and €500m and we typically seek to invest equity of between €25m and €150m from our €2.8bn fund, Equistone Partners Europe Fund VI.

We work closely with existing management teams to understand the drivers of their business and the ways in which they can grow, either organically or by acquisition.  We believe in empowering strong management teams with capital and ideas, focusing on adding strategic value to a business.  

In each stage of the investment process Equistone considers the implications of the investment from an ESG perspective, focusing on areas such as ethical sourcing, workplace practices, board-level governance, and environmental impact. Members of the Investment Team have been required to include relevant ESG analysis in investment committee papers since mid-2012 and ESG factors for each portfolio company have been featured in quarterly reporting.
 

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]

Equistone will invest in companies that are strategically attractive market leaders with significant growth potential, whether organic or via acquisition. Post-acquisition, Equistone provides sustained strategic guidance and challenge to management teams as they pursue their growth objectives, through board representation in a non-executive capacity. Equistone's established value creation methods are pragmatic and locally-adapted. They are designed to support management in their strategic development of each business, by any or all of: international expansion, domestic growth and new product development or innovation. Portfolio companies are positioned to be strategically attractive for sale to corporate acquirers and larger financial buyers.

Equsitone has a Responsible Investment Policy which is embedded in the culture of the business and its decision making process.

Equistone will continue to seek opportunities to create outstanding value for investors whilst making a positive impact on the communities our companies serve. In making investment decisions, we aim to avoid investing in companies that do not:

  • Respect human rights
  • Comply with current legislation (including environmental and social legislation)
  • Seek to comply with their industry standards and best practice

Furthermore, under the terms of our fund documentation, we will have regard to the following when making our investments:

  • We will not make any investment in a portfolio company whose principal business is either (i) the manufacturing, distribution or sale of arms or ammunition or (ii) the manufacturing, distribution or sale of pornography, without the prior consent of our Investor Advisory Committee;
  • We will not knowingly make an investment in a portfolio company which seeks to exploit child labour;
  • In our review and consideration of prospective investments, we consider the ethical ramifications of our investment activities;
  • We endeavour not to invest in enterprises which deliberately and repeatedly violate the rules laid down by the national authorities in which such enterprises operate; and
  • We will include specific commentary on relevant ESG issues in our communication around new investments and in our reporting.

As a signatory of the UNPRI, Equistone is committed to promoting industry best practice ESG initiatives throughout our own organisation and the organisations we interact with.

 

 

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.

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

URL/Attachment

02.3. Additional information [Optional].

We continue to be a member of France Invest's Initiative Climat International (iCi) and the UNPRI. The signing of these agreements reinforces Equistone’s responsible investment policy, which already takes sustainable criteria into account and requires Equistone to publicly disclose and report on our commitment to ESG.


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.

The Board of Equistone Partners Europe Limited makes the investment and exit decisions and is guided by recommendations of the European Investment Committee, A Management Board makes business and operational decisions on a Europe-wide basis.

Limited Partner Advisory Committee approval and consent is required for any potential conflicts of interest related to an investment.

Additionally, Equistone maintains a Conflicts of Interest Map which:

       - Records the types of activities which have been identified as activities where a conflict of interest may arise and the procedures established to identify and manage any such conflicts; and

       - References the disclosures made about conflicts to investors and clients in accordance with EPEL's regulatory and contractual obligations. All disclosures to investors are made in writing (including by email).

The Conflicts of Interest Map is prepared on a broad and group-wide basis. Accordingly, it notes certain conflicts of interest which are not strictly speaking conflicts of EPEL but are conflicts of the general partners of the Funds or of EPEL's portfolio company directors.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

Equistone’s Investment Committee will discuss any potential ESG issues identified and will not proceed with an investment until any potential material issues have been resolved. Protocol for resolving the issues and defining how material the ESG incidents are will be handled on a case-by-case basis.

We sit on the board of each portfolio company and in the instance an incident is flagged the board members will work with the management teams to ensure the incident is resolved.


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