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eQ Asset Management Ltd

PRI reporting framework 2020

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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

ESG Objectives

          We always endeavour to ensure that selected managers have defined their responsible investing policy and they provide us a copy of the policy and related documents.
        
          We endeavour to affect the selected managers to avoid sectors and businesses that might raise ethical questions.
        
          Under ESG DD eQ Private Equity aims to find out prospective fund manager’s attitude including its ESG policy and overall commitment to sustainability. As part of our ESG DD, prospective fund managers are requested to describe how they integrate their responsible investing policy into their investment processes (e.g. ESG check lists, usage of external consultancy services, ESG disclosure policy). Our target is to get a comprehensive understanding of how ESG matters are incorporated into manager’s investment process, dedicated ESG resources and the process of managing and reporting ESG matters.
        
          PE fund investing is a blind pool by definition and the engagement pre-investment takes place in form of participating in AGMs and contributing to advisory board work. Also direct dialogue with managers is carried out.
        
          When there is a decision making situation regarding the investee fund's activities, eQ always will use our voting right.
        
          We carry out frequent ESG queries in our investee funds and continuously endeavour to impact on their responsible investing activities.
        
          eQ Private Equity continuously monitors investee funds and actively promotes the development of ESG performance within investee funds. Monitoring is based on investee funds’ quarterly reporting, meetings with the managers of the investee funds, annual general meetings and advisory board discussions as well as eQ’s own annual ESG query.
        
          As part of the legal documentation, eQ Private Equity requests a side letter acknowledging our PRI status and our ESG reporting requirements. Commitments are made after a thorough discussion on ESG status in manager processes and when we are confident the manager will be able to comply with our ESG goals.
        

Incentives and controls

Reporting requirements

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

          If none of the above lead to satisfactory solution, final step is to sell the PE investments in secondary markets.
        

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

          eQ Private Equity continuously monitors investee funds and actively promotes the development of ESG performance within investee funds. Monitoring is based on investee funds’ quarterly reporting, meetings with the managers of the investee funds, annual general meetings and advisory board discussions as well as eQ’s own annual ESG query.  Any failure to adhere to the agreed reporting, for example on ESG events, or slipping of standards, or events arising that are clearly in conflict with DD process findings and expectations are reacted upon. These will include dialogue, but may also result in a manager not being selected for next fund raising rounds. In PE investing ESG objectives are not practical to be hard coded, or contractually enforced, therefore, emphasis is heavily focused on pre-investment assessment and monitoring.
        

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