Although ESG criteria are present across all of Altamar’s activities and departments, its strategy is focused on incorporating them into the investment processes since asset management is its core activity and the one with which the Firm can generate the greatest value.
Principles for Responsible Investment (PRI)
Altamar perceives the disclosure of its sustainable and responsible investment (SRI) initiatives as an essential element in strengthening the confidence of its investors. As a signatory to the United Nations Principles for Responsible Investment (PRI) since 2016, Altamar provides its investors with clear and transparent information on its SRI and ESG practices and policies through the preparation of the PRI Annual Report. The ESG Team analyzes the results obtained in the PRI Assessment on an annual basis, identifying the actions required to improve and consolidate our results. These actions are included in the Annual ESG Action Plan, approved by the ESG Committee.
Engagement with GPs
The Firm gives great importance to dialogue (engagement) with the managers of the underlying funds in which it invests (General Partners – GPs) as this enables the acquisition of a good understanding of the commitment and practices of its GPs and the monitoring of their progress and evolution.
To reinforce this dialogue, and as part of the Due Diligence process, Altamar requests information from its GPs on its SRI policies on a regular basis through the submission of the ESG Due Diligence Checklist. This is a questionnaire prepared by the ESG team that consists of a series of questions corresponding with the following themes: commitment or engagement with ESG and SRI, measurement and monitoring of ESG (through KPIs, etc.) and integration of ESG criteria into the investment process.
With regard to measuring the commitment of our GPs, an internal scoring model has been established based on the weighting of the checklist questions so that each GP is classified in one of the four categories: Outstanding, Good, Compliant and Weak.
In addition, an Exclusion Policy has been developed through which a list of restricted activities or sectors has been established in which Altamar will not make direct investments, co-investments, or participate in secondary market investments with exposure to companies that are included in this list due to their activity. As for indirect investments, Altamar is requesting a formal declaration through the ESG clause in the Side Letters in line with this policy to confirm that GPs will not invest in these sectors.
At the time of formalizing an investment commitment, and after reviewing the regulatory aspects concerning ESG in the legal documents, the manager is asked to incorporate a series of clauses in the Side Letters that formally cover the main commitments that Altamar wishes to obtain from the GP in terms of ESG.
As part of the Annual ESG Action Plan and based on the conclusions drawn from the internal scoring model, a criteria for updating the ESG DD Checklist has been established, enhancing the engagement with the underlying GPs and promoting ESG practices across the industry.
Additionally, the members of the investment teams who attend the GPs’ Annual General Meetings, gather information on ESG matters discussed during these events. This way, the GPs’ degree of commitment to SRI is verified against the answers reported on the ESG DD Checklist, and their performance is monitored each year.
Finally, as part of the Side Letter, Altamar asks fund/company managers for regular information on the incorporation of ESG criteria into their investment policies throughout the life of the investment.