RI Overview
Genstar Capital believes that responsible corporate behavior with respect to responsible investment (RI) factors can mitigate risk and have a positive influence on long-term financial performance.
Genstar became a signatory of the United Nations backed Principles of Responsible Investment (PRI) in 2015 and member to the Guidelines for Responsible Investment developed by the American Investment Council (formerly the Private Equity Growth Capital Council) in 2007. In accordance with the PRI requirements, Genstar reports publicly on its responsible investment activities each year including the disclosure of its PRI Transparency Report (our latest report is available here).
To the extent consistent with our fiduciary duties, our funds’ private placement memoranda, and our limited partnership agreements with our investors, Genstar’s investment process is based on guidelines that are principally consistent with the Guidelines for Responsible Investment developed by the American Investment Council (formerly the Private Equity Growth Capital Council), the UN Guiding Principles on Business and Human Rights, the Ten Principles of the UN Global Compact, and the Financial Stability Board (FSB) Taskforce on Climate-Related Financial Disclosure recommendations.
Investment Process
Genstar considers selected RI factors as part of the investment process. Considerations begin in the pre-investment phase and continue during our ongoing monitoring of and engagement with portfolio companies. Recognizing that the relative importance of RI factors vary across industries, geography and time, our consideration of RI factors is tailored to the particular investment. Our focus is on RI issues that are, or could become, material, to long-term financial performance, including, as applicable, salient human rights risks.
Genstar seeks to identify relevant RI risks and opportunities as part of the due diligence process for each portfolio company acquisition. Our due diligence takes into account, to the extent applicable and available, information from the target company, third party information and data, third party standards and guidance and stakeholder engagement. During the due diligence process, the investment team, together with third party consultants, identify opportunities where policy development and/or implementation of RI initiatives would add material value to the portfolio company. At the conclusion of the due diligence process, our investment professionals share any material findings with the Investment Committee.
Following acquisition, we have a formal ongoing management and monitoring program to mitigate RI risks and invest in RI opportunities throughout our ownership period. As part of this program, we follow up on risks identified in due diligence. Portfolio companies are periodically required to provide us with information on their RI initiatives.
Investor Relations & Reporting
Genstar is dedicated to transparency in the reporting to our investors of our RI process, its implementation and results subject to availability and reliability of relevant data allowing for such reporting. We value RI-related expertise of our investors and will make every reasonable effort to align our responsible investing goals with theirs. Genstar is committed to making RI progress available to our investors and will provide significant milestones achieved annually along with our goals for the future.
Genstar RI Process
Our RI Committee monitors this policy and the Genstar RI process. The RI Committee includes senior investment, management and compliance. The RI Committee will at least annually review this policy and the effectiveness of our related procedures, and will recommend modifications as it determines to be appropriate.
Cooperation with the Genstar RI process is possible through a culture that encourages collaboration, authentic relationships, transparency and accountability. Genstar is committed to volunteering as a team through contribution and effort towards disadvantaged groups, and internally making value adjustments to our carbon footprint.
All Genstar employees will attest to this policy annually. Genstar personnel receives periodic training on the implementation of this policy, as needed.
EU Sustainable Finance Disclosure Regulation
The consideration of RI risks by employees is important in the advancement of a career at Genstar. Genstar is keen to ensure that all employees are fully aligned with the RI Policy and adherence to such policy will be considered in every individual’s performance assessments. Such performance assessments will be linked to and impact the remuneration of employees.
Genstar does not currently consider the principle adverse impacts of investment decisions on sustainability factors (“PAIs”) within the meaning of the EU Sustainable Finance Disclosure Regulation (“SFDR”). Whilst RI considerations are integrated into Genstar’s investment process as outlined herein, the detailed rules underlying the SFDR would require Genstar to commit to gather data in line with the minimum PAI requirements of the SFDR, which is currently not practicable due to limited and scarce data being available. The position will continue to be monitored and reviewed by Genstar as interpretation of the underlying rules crystallizes and market practice becomes apparent.
