Engaging with portfolio companies
Engaging with portfolio companies
Our vision is to bring sustainability to the heart of the funds’ investment approach, in particular for the buyout funds’ portfolio companies. It is considered from the very start of the investment process and guides the identification of opportunities.
Engagement by strategy
We engage with the funds’ portfolio companies on ESG during the investment period. The focus is on the buyout funds where Permira has the greatest influence and engagement is tailored depending on the commitments of the relevant fund under the EU SFDR.1 Engagement in the PGO funds’ portfolio companies is more limited and is focused on ESG risks identified during due diligence or emerging post-investment, as relevant.
In November 2022, we held our Sustainability Conference in London, attended by over forty delegates from companies across the Permira portfolio. We shared knowledge on sustainability strategy, climate change and DEI.
In addition to the Conference, we also invite companies to meetings for specific verticals, where CHROs or IT directors come together to share ideas. We also held teach-ins and webinars throughout the year on ESG-related topics, such as ESG reporting.
Permira Credit, seeks to engage on ESG risks with direct lending (PCS) portfolio companies, or CLO managers for structured credit (Sigma). Engagement varies by fund and is tailored depending on the commitments of the fund under SFDR, as set out below.
Buyout fund portfolio companies
| Fund Type | |||||
|---|---|---|---|---|---|
| Private Equity (PE) | |||||
| Buyout | Growth Opportunities |
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| Extent of engagement based on level of influence over underlying portfolio companies | |||||
| Direct engagement with management teams on ESG strategy, initiatives, risks and / or opportunities | 2 | ||||
| Portfolio company ESG guidelines | |||||
| ESG sections in portfolio conferences 3 | |||||
| Sustainability conference and webinars | |||||
| RepRisk monitoring for material reputational risks | |||||
| Third-party external cyber monitoring | |||||
| Annual ESG monitoring and reporting | |||||
Permira Credit
| Fund Type | |||||
|---|---|---|---|---|---|
| Credit | |||||
| Direct landing |
Structured credit |
CLO management |
|||
| Extent of engagement based on level of influence over underlying portfolio companies | |||||
| RepRisk monitoring for material reputational risks | |||||
| Bilateral engagement with sponsors, CLO managers, banks and borrowers (where applicable) on ESG initiatives and risks | |||||
| Annual request for ESG data | 4 | Pending 5 | |||
| Direct engagement and support provided to management teams of selected companies to enhance their ESG strategy and approach to managing ESG risks, with a focus on companies that are non-sponsored or where the funds hold an equity stake | |||||
| Portfolio conferences and webinars, focusing on companies that are non-sponsored or where the funds hold an equity stake 6 | |||||
ESG monitoring and reporting
We believe we are able to use insights taken from the annual monitoring and reporting to more effectively target ESG engagement and to share best practices.
Read more
1 Funds classified as Article 8 under SFDR may require portfolio companies to take definitive steps to meet certain ESG targets depending on the environmental and / or social characteristics that the fund promotes, and to report regularly on their progress against the agreed targets.
2 For PGO there are fewer opportunities for ESG engagement with management teams therefore this happens less frequently than across the buyout funds.
3 Targeting specific roles such as Legal Counsels, Chief Human Resources Officers or Chief Operating Officers. Portfolio companies where the funds have equity or where there is no sponsor are invited.
4 Primary investments only; does not apply to secondary investments made by PCS5.
5 In development in 2023 for Providus CLO VII and subsequent Providus CLOs.
6 Targeting specific roles such as Legal Counsels, Chief Human Resources Officers or Chief Operating Officers.