HOW WE INVEST
For secondary investments, our teams conduct ongoing assessments on the underlying managers in each deal to gauge their overall ESG commitment. The type of diligence we perform depends on whether the opportunity is a traditional deal – involving the purchase of one or more limited partnership interests from a single seller – or a complex investment, which often requires more resources and negotiation.
These investments often involve the purchase of hundreds of underlying companies over which HarbourVest has little to no influence. In these instances, we research whether the manager has existing policies or procedures, and if not, encourage them to consider adding them. Our investment teams also examine the existing portfolio of assets to identify any ESG concerns.
For complex investments, where HarbourVest is either a large or majority LP, we have more influence to advocate for responsible investing with GPs and newly formed funds.
In addition to determining whether each manager has an ESG policy, we also conduct portfolio screens on investments and may potentially exclude businesses in order to minimize the reputational risks these assets could pose within a diversified portfolio.
Industries not considered for investment include but are not limited to child/forced labor, human trafficking, and any organizations that are non-OFAC compliant. Investment opportunities that are subject to further review, including discussion of the specific ESG risk(s) and identification of mitigants for considering the investment further, include but are not limited to:
In 2019, our secondary team began the work of developing ESG profiles of underlying assets in deals using the same scorecard our primary team utilizes. We established the following criteria to warrant deeper ESG consideration:
- Transactions involving a spin-out or newly formed GP
- HarbourVest represents greater than 25% of the LP base
- Commitments to newly formed funds
- HarbourVest gains a new advisory board seat as part of an investment
To view the public version of HarbourVest’s 2019 PRI Transparency Report click below. To access our 2019 Private Transparency Report and corresponding Assessment Report, please log on to HarbourVest’s secure Investor Log-in website using your e-mail address and password. Once logged in, go to the ‘News and Update’ tab and select ‘Market Updates’.