RepRisk interviews Adam Black, Partner and Head of ESG & Sustainability at Coller Capital
1. RepRisk: Please provide some insight into your specific role at Coller Capital (Coller) and explain the work that you and your team do.
Adam Black: The role continues to evolve as the business develops and grows.
As an investor in the secondaries market, we are both LP and GP – so a hybrid investor – meaning our approach to ESG is also somewhat hybrid.
When I joined in March 2016, there were elements of ESG that were already well established, but I was largely given a blank canvas to develop. The creation of a full-time dedicated ESG role within the investment team was new for the firm and untypical within secondaries at that time.
From a personal perspective it soon became apparent that the integration of ESG into the investment processes of a large secondaries firm was going to differ markedly from the ESG integration I carried out in my previous role at a buy-out firm.
The main difference is the need to focus on the underlying private equity managers (GPs) into whose funds we might invest. We have exposure to many thousands of companies through investments in the underlying GPs. However, we are removed from the level of the assets and the ESG role in secondaries is not portfolio company facing. Nonetheless, the team draws upon prior operational experience that we believe brings a level of authenticity and rigor to our approach.
Our main focus is on the analysis of every investment opportunity prior to it coming to our Investment Committee. This includes thinking about how we might engage post investment and how best to play our part in influencing the wider market. In doing so we work with, but are independent of, the deal teams.
We are mindful that many firms talk about “integrating ESG into the investment process” and conscious that our approach must not simply tick a box. Yes, there are elements that involve “ESG Checklists” but we give very careful consideration to every prospective investment.
We screen for potentially problematic assets using internal and third-party databases, notably RepRisk, but we do not base a decision on third-party data alone. We also review the response to our detailed questions (GP and asset related), and how the GP comes across (both in public and importantly also in practice when we engage with them on a transaction or wider ESG initiative).
All this information feeds into the mechanics of our process to inform our formal ESG comment for the Investment Committee.
Our ESG Policy applies across the business at the firm and fund level. The ESG team is therefore also active on a wide range of other projects and initiatives across the firm and beyond, working closely with all of Coller’s business functions.
2. RR: Coller became a client of RepRisk in 2016. How do you and your team incorporate RepRisk data into your investment strategy and processes?