Norsad recognizes that growth needs to be sustainable by impacting jobs (reducing poverty and unemployment), enabling diversification (reducing dependence on resources and commodities) and promoting economic and socio infrastructural effects. Norsad's goal is to impact growth and development.
Norsad achieves its objective through the provision of direct financing solutions on the debt spectrum on a bilateral basis, rather than buying securities on a market. As a debt investor, Norsad does not appoint management or design the value creation plan of the investee company. However, Norsad remains an active investor through the continuous engagement with the investee company over the life of an investment. Norsad has a post investment management department which monitors the investment for compliance with undertakings made at investment through direct client communication and also by visiting the investee companies periodically. Companies which have been identified to have high ESG issues are visited more frequently and, occasionally, with the assistance of a specialist ESG practitioner.
Depending on the stage of the investment (early stage vs growth) and the broad sector categorisation (Real vs Financial), Norsad can request an observer seat as a condition to extending a facility. The observer seat allows Norsad to closely monitor the investment to ensure compliance and inculcate a culture of good governance practices, which in turn underpins sustainable companies. Norsad imposes a contractual fee to the investee for non-compliance and adherence to stated sustainable practices which, if persists, can ultimately lead to contractual default and repayment of the Norsad facility. These requirement are incorporated in the legal credit facility agreement process.