ESG Report 2021

Welcome to our environmental, social and governance (ESG) report for 2021.1 We are pleased to share progress as we continue our journey of responsible investment.

2021 - A Year in Focus

ENVIRONMENT

We are looking to enhance the visibility of climate and other environmental risks in the funds2 to mitigate negative impacts. We seek to lead by example as a responsible and forward-looking firm.

GOVERNANCE

We believe that well-governed businesses perform better. We aim to look for the same standards of ethical conduct, integrity and transparency across the funds2 as we do of ourselves, and in certain cases promote social characteristics as part of the fund’s investment strategy.

SOCIAL

We aim to drive social responsibility across the funds2, with a focus on diversity and inclusion. As a firm, we invest in the growth of our diverse talent, while supporting local communities through The Permira Foundation.

RESPONSIBLE INVESTING

As we seek to build lasting value, we take a proactive approach to responsible investment, taking different approaches by strategy and fund. In certain cases, environmental and social characteristics are promoted as part of the fund’s investment strategy.

EVOLVING OUR APPROACH

We aim to employ a forward-thinking and collaborative mindset to enable long-term value creation for investors and wider stakeholders. Over the years, the Permira business model has sought to evolve to respond to ESG megatrends and regulatory change.

About this Report

The report spans our global private equity (PE) and private credit businesses. Data are disclosed at strategy level for the PE buyout funds (where we have a higher level of influence), and certain growth funds. Individual fund and company performance is made available to investors in the funds, in separate, confidential reports. Reporting extends to Permira’s ESG activities as a firm, including The Permira Foundation.3

The ESG landscape continues to develop and this report presents the position we had adopted as at 31 December 2021. As we look forward, our monitoring and reporting is being reviewed to consider the latest developments on the UK and European regulatory agenda on ESG, notably the Sustainable Financial Disclosures Regulation (SFDR)4 and the Taxonomy Regulation.

As at 31 December 2021:

  • Two private equity funds were provisionally classified under SFDR as mainstream funds (also referred in the market as Article 6 SFDR products), namely Permira VIII, a buyout fund, and Permira Growth Opportunities II, a private equity growth opportunities fund. As Permira VIII had not closed any investments at that date, it is not included in this report. On 25 January 2022, we reclassified Permira VIII as Article 8 product under SFDR following certain changes to its investment strategy, which we communicated to investors in an Information Memorandum update on that date.
  • Other private equity funds and credit funds that were closed to marketing prior to the entry into force of SFDR in 31 March 2021 (the legacy funds) and have been included in this report have not been classified under SFDR but this is now under review given the release of an SFDR Q&A update from the European Commission in May 2022.

The SFDR classification of legacy funds, as well as any potential reclassification of mainstream funds, are subject to several considerations which our ESG program keeps under review, in particular as additional guidance becomes available.

Some of the considerations taken into account when determining the Fund’s ESG investment strategy include whether their investment confers control of the portfolio company, the length of time they have been invested, information available from the company and the relevant maturity of the relevant company’s ESG program and approach at the date of investment by the fund and the priority of ESG given the nature of the company’s sector and activities.

In particular, the legacy funds are of significance given how much our ESG program has developed and continues to develop from its initial focus on the buyout funds now extending to other fund ranges.

1. Year ending 31 December 2021. All data are within this time period unless otherwise stated. We may also refer to events or developments outside of the reporting period, where relevant.

2. With a focus on private equity buyout funds where we have the greatest influence. The focus is on buyout funds, where we have the greatest influence. Within the buyout funds, more focus is placed on companies with higher ESG risk or opportunity. Engagement in the PGO portfolio is more limited and may focus on ESG risks identified during due diligence or emerging post-investment, as relevant. For direct lending, there are fewer opportunities for direct engagement and has previously been focused on companies where the funds have equity or there is no sponsor.

3. Registered by the Charities Commission for England and Wales as charity number 1175061. Find out more about The Permira Foundation.

4. We assessed the categorisation of the Permira funds under SFDR and there is currently a combination of unclassified legacy funds (closed to marketing prior to 10 March 2021), ‘mainstream’ funds (sometimes referred to in the market as Article 6 SFDR products) and ‘light green’ funds (Article 8 SFDR products that promote certain environmental and social characteristics but do not commit to making any sustainable investments). We are currently in the process of reviewing the unclassified legacy funds to determine their SFDR categorisation following additional guidance from the European Commission on the treatment of funds raised prior to 10 March 2021. We continue to keep classifications under review as market practice around SFDR continues evolving and additional regulatory guidance is expected. Find the latest on SDFR and the Permira funds here

5. To read further disclosures, please click here.