Responsible investment matters to AlpInvest. We believe it can reduce risks and enhance value creation and hence makes sound commercial sense. AlpInvest has been a leader in this field since 2008, contributing to its development and implementation across the private equity industry.
AlpInvest has been a signatory to the UN-backed Principles for Responsible Investment (PRI) since 2009.
What is Responsible Investment?
Responsible investment is about incorporating ESG (Environmental, Social and Governance) issues into investment decision making and ongoing portfolio management.
Responsible investment is an integral part of the AlpInvest culture. We believe it has a valuable role to play in the private equity industry for general partners (GPs), limited partners (LPs) and portfolio companies. First and foremost, we believe that responsible investment is good for business. Taking a proactive approach to ESG issues can help to deliver value and ultimately contribute to investment returns.
AlpInvest takes an active approach
In 2008, we implemented formal processes to integrate ESG into our investment processes and to promote ESG as an investment consideration both within our portfolios and more broadly among GPs. AlpInvest’s responsible investment strategy is overseen by its Operating Committee, and a dedicated Responsible Investment officer is responsible for its development and integration. Our investment teams are closely involved in the execution of this strategy and, together with our legal team, are responsible for ensuring that our investments comply with the criteria we have agreed upon with our investors.
As a result, every new investment made since 2009 has been subject to our ESG due-diligence process. This includes, in total, over 400 primary fund commitments, secondary transactions and co-investment opportunities (through December 31, 2015). Our work in this field has given us an in-depth understanding of the progress made on responsible investing across the private equity industry.
We engage directly with our GPs on ESG issues at various levels across the world. We undertake for example one-to-one meetings, providing education and practical guidance on integrating ESG considerations into their investment processes. We also play an active role in monitoring ESG incidents, investigating those we become aware of in order to further our understanding of how GPs and portfolio companies are managing such issues. Across the sector, we have spoken at related industry events and provide responsible investment training.
AlpInvest has been involved in a wide range of ESG-related private equity initiatives, including the PRI Private Equity Steering Committee, Institutional Limited Partners Association (ILPA), the Invest Europe Responsible Investment Roundtable and the Dutch Private Equity Association (NVP) ESG Committee.
Further information on our responsible investment activities can be found in our Annual Review (link).