Acting responsibly is a key part of our investment philosophy. As an investment company, our purpose is to grow capital value and income over the long term, creating an increasing store of generational wealth for our shareholders. We believe that a responsible approach towards the businesses in which we invest is essential to our continued success and is closely aligned with the risk management considerations of a long-term investor.
We believe that responsible investment and business success go hand in hand. We are embedding the consideration of Environmental, Social and Governance (‘ESG’) factors into all stages of our investment journey. We remain committed to constructive, long-term focussed engagement with the companies and funds in which we invest and believe that careful stewardship is a key tool to address ESG risks and drive positive change. We expect to invest in businesses which will grow, provide employment and generate economic benefit in an environmentally and socially responsible way, both during and after our ownership. We aim to invest in companies and funds that take a responsible approach towards the environment and society, built on high governance standards.
Historically our stewardship activities have focused primarily on governance matters, most notably in our majority owned investee businesses which we seek to operate in line with industry best practice. However, we will build on this approach by fully incorporating ESG matters into our investment decision making to ensure that a broader spectrum of issues that are important to us are formally evaluated alongside other key criteria. We will expect our investment managers to consider these issues fully in proposing new additions to our portfolio holdings.
We continue to meet with our shareholders and listen to any concerns they may have.
We aim to invest in global businesses with recognised brands, intellectual property and strong market positions, that have a good track record of delivering returns. Our approach means that we do not generally invest in capital intensive businesses or any companies involved in the extraction and production of coal, oil or natural gas. We also tend to avoid industries that may be exposed to burdensome regulation or litigation.
We make considered use of our voting rights and vote all our stock ahead of all shareholder meetings. As a consequence of our involved investment style, we expect to vote in line with management recommendations but are prepared to abstain or vote against resolutions where we consider they are not in the interests of our own shareholders.
We invest in established businesses, across a range of sectors, that have robust operating margins, strong management teams and good growth opportunities. Where these businesses operate in regulated sectors, we monitor compliance and the maintenance of positive working relationships with the relevant regulatory authorities.
We introduce a high standard of corporate governance into these businesses, generally with an independent, experienced non-executive chairman and formal audit and remuneration committees to support the board. Our Private Capital team take non-executive roles in these businesses and use their positions to maintain close relationships with the management teams.
Additionally, we hold frequent meetings with management which cover a wide range of subjects, including ESG matters, and regularly review performance.
We invest into a broad range of private equity funds across a range of sectors in North America and Asia.
We spend time building relationships, becoming familiar with the people behind the fund decision-making and then aim to stick with them for many years. We often sit on their advisory board and become significantly involved in the way the fund develops.
We expect managers to consider all factors, including ESG matters, when seeking to maximise returns while taking account of the associated risks.
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