GLOBAL - The US Private Equity Council has launched a set of comprehensive responsible investment guidelines its members will apply prior to investing in companies and during their period of ownership.
PEC said the guidelines grew out of a dialogue between its members and a group of the world's major institutional investors, which took place under the umbrella of the United Nations-backed Principles for Responsible Investment (PRI).
The California Public Employees Retirement Systems (CalPERS) interim chief investment officer Ted Eliopoulous said: "As a limited partner in many PEC members' funds, we know that private equity has not only generated positive returns for our beneficiaries but has also been a positive force in building stronger, more competitive companies."
CalSTRS chief investment officer Christopher Ailman added these guidelines recognised long-term issues that affect the sustainability of corporate earnings.
The guidelines call for PEC member firms to work through appropriate governance structures, such as the board of directors, with portfolio companies with respect to environmental, public health, safety and social issues, to improve performance and minimise adverse impacts in these areas.
They also call for private equity managers to provide timely information to their limited partners on the matters concerning responsible investment and work to foster transparency about their activities.
USS head of alternative assets Michael Powell commented: "USS is pleased to welcome the development of these guidelines by the PEC as a demonstration that the leaders in this sector recognise the importance of environmental, social and governance issues in the selection and management of their assets."
PEC members are: Apax Partners; Apollo Global Management; Bain Capital Partners; the Blackstone Group; the Carlyle Group; Hellman and Friedman; Kohlberg Kravis Roberts; Madison Dearborn Partners; Permira; Providence Equity Partners; Silver Lake, THL Partners and TPG.
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