Side Letter: GPIF on the return to a ‘better normal’, how Cinven does ESG, Allianz’s impact push

Responsibility and sustainability in private markets investment are the topics du jour. The pandemic, far from distracting investors from non-financial outcomes, has highlighted the need for responsible stewardship of assets and capital. Here's today's brief, for our valued subscribers only.

They said it

“How can investors get confidence one is not getting prioritised dealflow versus the other? The fund should eat first, but if the GP stands to make more money from the SPAC, you have to wonder”

Christopher Schelling, managing director at Windmuehle Companies and former head of private equity at Texas Municipal Retirement system, raises a flag about potential conflicts where private equity firms launch SPACs alongside funds. Subscribers to sister title Buyouts can read more here

Just happened

Returning to a better normal

It’s been seven months since three of the world’s biggest institutional investors – Government Pension Investment Fund, the California State Employees’ Retirement System and Universities Superannuation Scheme – warned of the dangers of ignoring sustainable investing and focusing on short-term returns. A lot has obviously changed since then, with the world plunged into crisis due to the pandemic. For GPIF, sustainability and environmental, social and governance issues have not taken a back seat. “Rather than stepping back from the covid-19 pandemic issues, we continue to pursue how we can materialise these ESG-related ideas,” Yoshitaka Todoroki, head of PE and infrastructure at the $1.5 trillion Japanese pension giant, told senior editor Adam Le in a Q&A session for PEI’s Responsible Investment Forum: Tokyo yesterday. “If we’re going to go back to normal, let’s go back to much better than before.” Full story here.

Getting their ‘S’ together

Cinven has started working with the University of Cambridge to develop a framework for the measurement and implementation of social factors (the ‘S’ in ESG), said Vanessa Maydon, the firm’s head of corporate affairs, at the BVCA Summit this morning. She also described how the firm, the 12th largest in the world according to the PEI 300, now gathers five non-financial key performance indicators as standard across its portfolio: carbon emissions, long-term absenteeism, incidents of ABC (anti-bribery and corruption), gender diversity and workplace grievances, and additional bespoke metrics for each portfolio company.

BVCA chair: Fiduciary duty means cutting losses

PE firms need to explain to their close to a million portfolio company employees in the UK that there are “winners and losers”, and that the industry’s job is to back the winners, said Neil MacDougall, chairman of Silverfleet Capital and current BVCA chair. “Private equity is going to get it in the neck,” he added. “One of the things we do is we just cut our losses. It’s just the way that investors expect you to behave. It’s your fiduciary responsibility to your investors.”


Allianz impact push

Allianz Global Investors, one of the world’s largest investors in private equity, has appointed a global head of sustainable and impact investing. Matt Christensen will “accelerate the growth of impact investing as part of the company’s growing private markets platform; lead the continued integration of ESG factors across AllianzGI’s existing range of public markets products, including stewardship activities; and support the development of new SRI products,” said the firm (press release). He held a similar role at AXA Investment Managers.

Eaton up

Placement firm Eaton Partners has bolstered its European bench, bringing in MVision’s European head Ophir Shmuel as co-head of EMEA alongside existing head Steve Eaton. Press release here.

Dig deeper

Institution: Fubon Life Insurance Company
Headquarters: Taipei, Taiwan
AUM: NT$4.79 trillion

Fubon Life Insurance Company has confirmed a $70 million commitment to Pomona X. The fund is managed by Pomona Capital.

As illustrated below, Fubon Life Insurance Company’s recent private equity commitments have been made to funds that focus on secondaries and buyout strategies across several regions.

For more information on Fubon Life Insurance Company, and more than 5,900 other institutions, check out the PEI database.

Today’s letter was prepared by Toby Mitchenall with Adam LeCarmela Mendoza and Alex Lynn

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