gn asi e el R potential sustainably - Apax Partners · In 2009, we adopted the Private Equity...

Apax Partners Sustainability Report

Releasingpotentialsustainably

Apax Partners Contents

Chief Executives’ introduction 03

Sustainable investing and portfolio monitoring 04

A global portfolio 06

Environment 07 Social impact 08 Governance 09 ESG performance data 10

Case study: Tivit 12

Apax Foundation 13

Our values 15

Conclusion 16


Apax Partners Sustainability Report02

Long term commitment

Apax Partners has been committed to sustainable investing for many years. Sustainability is embedded in our investment process, to help release the full potential of the businesses in which our funds invest.

This means that issues relating to sustainability are raised in the early stages of any potential investment opportunity and are monitored throughout Apax’s stewardship of the company.

Sustainability leadership

In 2009, we adopted the Private Equity Council’s guidelines for responsible investment and became a signatory to the UN-backed Principles for Responsible Investment (UNPRI) in 2011.

The Firm aims to lead the private equity sustainability movement, not only by supporting these principles, but more importantly, by putting them into practice.

At the heart of our strategy

Sustainable investing is vital to Apax Partners’ success and it has become an integral part of the investment team’s approach.

Andrew Sillitoe Co-CEO, Apax Partners

Mitch Truwit Co-CEO, Apax Partners

The Firm has made sustainability one of the key layers in the Apax strategy and requires that its investment professionals focus on sustainability issues as one of the standard modules in due diligence.

Sustainable returns

We believe that the firms which are most proactive in their wider responsibility will deliver the best economic returns. Economic returns are not a contradiction to social and sustainable investing; it is the way leading private equity firms will deliver value. Sustainable investment is not only the right thing to do, it also delivers measurably better returns.

Sustainability Report

The Apax Partners Sustainability Report showcases the progress our investment team and our portfolio companies have made in our ESG journey. We will measure our success by the degree to which we will have passed on our responsibility and duty as shareholders to ensuring that our portfolio companies embrace the integration of corporate responsibility into their day to day business activities.

Chief Executives’ introduction

We believe that the firms which are most proactive in their wider responsibility will deliver the best economic returns.

Committed to delivering value sustainably

Mitch Truwit Co-CEO, Apax Partners

Andrew Sillitoe Co-CEO, Apax Partners


Sustainable investing... What we do

Incorporate ESG issues into investment analysis and decision-making processes

Promote acceptance and implementation of the principles within the investment community

Be active owners and incorporate ESG issues into ownership policies and practices

Seek appropriate disclosure on ESG issues by the entities in which we invest

Work together to enhance our effectiveness in implementing the Principles

Report on our activities and progress towards implementing the Principles

Apax Partners has a well-defined Corporate Responsibility policy which is guided by its fundamental values (Integrity, Stewardship, Community, People and Relationships – see page 08).

Active ownership

Pre-investment activity focuses on the identification of ESG risks, the company’s ability to manage ESG considerations and its performance related to ESG in the past.

Pre-investment

Following the successful roll out of the pre-investment ESG diligence into the Firm’s processes, portfolio company specific ESG issues are managed on a day-to-day basis by the companies themselves, using an innovative software system (see overleaf).

Post-investment

1 3 5

2 4 6

UNPRI Principles for Responsible Investment

Since adoption of the PRI Principles (see below), sustainability has been embedded in Apax’s investment process as a tool to help release the full potential of the businesses in which Apax funds invest. This means that issues relating to sustainability are raised at an early stage in any potential investment opportunity and are monitored throughout Apax’s ownership of the company.

The Firm coordinates its sustainability efforts through a sustainability committee consisting of five members from different functions within the Firm. The committee meets on a monthly basis and reviews all matters relating to Apax’s internal and external sustainability related activities; the committee ensures that implementation of sustainability matters is achieved across the investment team, the Apax portfolio and the Firm.

The Apax investment team undertakes standard pre-investment Environmental, Social and Governance (ESG) due diligence for each new investment made by the funds. The due diligence is based on a detailed questionnaire which has been drawn up to cover the ESG areas which Apax believes are key to understanding the ESG profile of the company in which the funds are considering an investment.

The outcome of the ESG due diligence review is presented to and reviewed by the Apax Investment Committee prior to each new commitment and areas of risk and opportunity are highlighted by the respective investment teams. The objective is to create a high degree of awareness upfront with regards to potentially relevant ESG issues which can contribute to value creation at a very early stage of ownership of the company.

The software facilitates key KPI data collection across ESG areas for each portfolio company. Once established, the system is designed to be self-sustaining and self-governing on the part of the portfolio companies, allowing each to take full responsibility for their respective ESG policies.

Apax investment team members are involved in ESG matters when they are tabled during Board meetings for the companies for which they are responsible. In addition, Apax investment partners are required to sign an annual Statement of Representation attesting that the portfolio company complies with its local regulatory framework and there is no awareness of any sustainability issues. Apax reports to its LPs on a semi-annual basis in a detailed manner and includes a section on latest sustainability developments for each company.


Portfolio monitoring... How we do it

KPI data collection

In mid-2013 the Apax Partners portfolio companies across Funds V, VI, VII and VIII were asked to provide input on 80 KPIs, based, amongst others, on the Global Reporting Initiative (GRI) guidelines, the leading international benchmark for sustainability reporting.

Portfolio implementation

The focus of the Apax sustainability effort has been on the implementation of a software solution to monitor, track and report on the environmental, social and governance performance of the Apax Partners portfolio companies.

A key feature of this programme is an annual data collection cycle designed to highlight each portfolio company’s performance in its key areas of risk and opportunity. A set of general key performance indicators (“KPIs”) across environmental, social and governance areas has been developed, which allows Apax to gather qualitative and quantitative data from its portfolio companies; in so doing, Apax is able to provide transparency on the portfolio’s ESG footprint to the Firm’s investor base. The software facilitates and streamlines the data capture of the KPI information and additionally functions as a central repository for ESG information and its related supporting documentation across the portfolio.

Once the software is implemented, each Apax portfolio company is able to maintain, track and record its own ESG data. For Apax Partners, the key benefit of this project is that it affords significant visibility and relevant data capture which in turn drives improvement of the ESG footprint across the overall Apax portfolio, as well as within each individual portfolio company; critically, the Firm is able to provide this information to LPs on an ongoing basis.

The Apax ESG Group With a response rate of over 80% of the eligible (majority owned and not planning an exit) Apax portfolio companies, combined generating almost 90% of the 2012 revenue pool, we are very pleased to have collected a dataset that represents a very large proportion of the overall Apax portfolio.

Throughout this report the group of companies that provided KPI data is referred to as the Apax ESG group consisting of: Psagot, KCI, Takko, Tivit, Sophos, Garda, Tnuva, Sisal, Unilabs, Orange CH, New Look, Farmafactoring, GHG, iGate, Paradigm, Golden Jaguar, Plantasjen, Trader

Media Group, Trader Canada, Capio, Travelex and Epicor. The Apax ESG group generated approximately US$ 21 billion (€16 billion) in global revenues and US$ 4 billion (€3 billion) in EBITDA and employed 166,000 FTE by year-end 2012. It represents a cross section of the key Apax investment sectors: Consumer, Healthcare, Services, Tech & Telco.

The scale of the ESG group puts us on a par with many of the world’s largest companies, so a proactive focus on sustainability is a fundamental part of our wider corporate responsibility.

Apax Partners Sustainability Report


Sustainability software system


In this section:

Apax Partners08 Releasing potential sustainably09

Environmental impact 07Social impact 08Governance 09ESG performance data 10

North America

16Companies

$5,592mInvested cost

$11,416mRevenue

Rest of the World

5Companies


$1,751mRevenue

Apax Partners has a globally diversified portfolio across 15 countries with differing regulatory frameworks. Total capital invested globally at year end 2013 was USD 12.9 billion, in 41 companies, generating combined revenues of USD 36 billion*.

Europe

20Companies


$22,749mRevenue

A global portfolio


*Buyouts only as at 31.12.2013

of the Apax Partners portfolio

Environmental impactExamples of environmental initiatives

Energy875m Kwh of electricity usage reported by 16 companies

Plantasjen Increased insulation in all new built stores. Installed heat pumps in 6 stores in the last 12 months. From increased insulation the company has saved approx 1/3 in energy consumption vs the old store format. Heat pumps have reduced energy consumption by approx 20%.

Capio Throughout the Capio Group there are a number of initiatives in place to reduce energy use such as investments in solar-panels (in Dannenberg and Bad Brückenau in Germany), the use of low-energy bulbs, green cars and automatic light switches. Energy-efficiency is an important parameter when making new investments in the construction of new buildings (Dannenberg in Germany and Bayonne in France).

Paper17,905 tons of paper purchased by 15 companies

Tnuva During the second half of 2012, Tnuva commenced a number of processes in order to reduce paper and packaging usage, which are currently in process, including: replacing hard cheese packaging from PVC package to Pet (which is more environment friendly); introducing foamed polystyrene sheets for FFS (instead of polystyrene only); replacing onetime egg cartons to plastic washable packages; reducing several bottles’ plastic packaging weight by way of changing the manufacturing technique to injection blow – all in order to reduce weight, costs and waste; gradually replacing wood pallets with plastic, in order to reduce timber waste and increase production safety.

14 companies account for 26% of CO2 emissions

5 portfolio companies account for 74% of CO2 emissions

Examples of environmental KPIs

Environmental data overviewThe ESG group reported almost full compliance with all local environmental regulations in 2012. In only one case an issue arose with regard to a local regulation on oil storage and waste transfer which was immediately addressed. There were no serious environmental incidents reported across the ESG Group.

Resources usage The Apax investment sectors are not focused on heavy industries but predominantly on services, retail, technology and digital businesses.

The Apax portfolio consists of a large number of “asset light” businesses which do not have a significant environmental impact. The majority of the resource usage is reported by a small number of companies. For example, out of 19 companies which provided data to calculate CO2 emissions, 5 account for 74% of all reported CO2 emissions in 2012.

The Apax portfolio is focused on reducing its global environmental impact – from the sourcing of raw materials, to the manufacture

and distribution of products, to the use and disposal of products by consumers, patients, and providers. The portfolio’s environmental stewardship initiatives will help protect the planet while improving efficiency, reducing costs and preserving their ability to do business in the future. Sustainability is not just the right thing to do, it can also boost innovation and profitable growth. This is why we clearly see it as a key differentiator and a competitive advantage.

What is the company’s current energy consumption?

Are there initiatives in place to reduce the energy footprint?

Does the company have an environmental policy?

What are the targets for the next 12 months?

Waste29% of the Apax ESG group portfolio has a waste management policy

KCI offers a recycling program for facilities and patients that allows safe disposal of certain single-patient Negative Pressure Wound Therapy (NPWT) devices. KCI provides this recycling program free of cost to the customer. KCI has partnered with Sharps Compliance Inc. to convert customer-recycled KCI single-patient NPWT devices into PELLA-DRX™. This material is then used in the manufacturing of homes, highways, and high rise buildings.

Water6.8m3 reported by 14 companies

GHG The company continues to focus on maintaining staff awareness and communications regarding water use (see example poster below). GHG has employed a specialist water savings consultancy on a gain-share basis. They have audited all site bills, benchmarked water consumption, and undertaken site surveys of water consumption at all sites where benchmarking indicates excessive consumption. This has resulted in a variety of remedial actions being implemented including reducing lavatory flushing, fixing failed valves, fixing faulty equipment, and reviewing opportunities for capital investment.

LTM serious environmental incidents 0%

Waste Management Policy 29%

Environmental Policy 36%

Initiatives to reduce water usage 48%

Initiatives to reduce energy usage 62%

Initiatives to reduce paper / packaging 67%

Compliance with all local environmental regulations 96%

830,497tons equivalent of CO2

were reported by 19 companies

Breakdown of CO2 emissions

Across our portfolio, we have a high number of initiatives in place that reduce complexity, waste and energy consumption. These initiatives range from: reducing electricity usage via replacing traditional light bulbs to led, reducing paper usage by setting default double sided printing in all of the offices and reducing water usage by investing in low flow fixtures, auto shut off faucets and other water reducing features.


Data representative of year ended 31.12.2012

Social impact

Social impact summaryThe Apax ESG group employs a large and very diverse workforce of 166,000 FTEs worldwide. The Group contains a number of very large employers, each employing over 25,000 full time employees, and a few small employers employing less than 1,000 FTEs. Across the board our portfolio companies strive to foster strong employee engagement and to develop the qualifications and expertise of their employees with career development programmes and training. A growing number of employees are seeking more flexibility in how they balance work with the rest of their lives; for example, childcare responsibilities. A number of our portfolio companies are now exploring options for offering flexible work schedules, part-time work and telecommuting.

Sick day and illness On average 5.7 days were lost per year, per employee to illness. Roughly 41,000 individuals chose a voluntary exit with the majority of this number coming from one company. There were approximately 10,000 redundancies across the Apax ESG group, with one company undergoing a reorganisation contributing to the majority of this number.

Health and safety In terms of health and safety, only four of the Apax ESG group portfolio companies do not have a health & safety policy in place. There were 4,900 work related accidents reported across the ESG group and one company had to pay a small fine for health and safety non-compliance.

Examples of social KPIs

What is the profile of the workforce?

Is there employee representation?

Does the company have a health and safety policy?

Level of voluntary turnover and redundancies?

Training and career developmentGarda GardaWorld career development centre has designed a career path and has created an online learning management system open to all Garda employees, based on customers’ requirements and employees’ requests. CDC (Career Development Center) and E-campus (online system) are used with great success and are slightly profitable, reinvesting the proceeds to improve training tools. It does not consume any money from the company’s P&L and has a great impact on the employees.

Employee benefits; promoting work-life balanceOrange introduced a number of new benefits for its employees, amongst others:- Extension of the Employee Leave Package for 3 years, with adapted indemnities (social solution for cases of structural change).

- Pilot project “Presence Management” for call center employees, aiming at proposing a better follow-up in case of regular sickness of employees.

- Implementation of “Family Service” which is an external service provided to all employees free of charge and confidential. This service includes: overview and research on places in daycare centers, after-school care, lunchtime care, day schools, private schools; placement with day families, nannies, au pairs; arrangement of childcare on demand, in emergency situations and during school holidays.

6 companies account for over 70% of employees

Across the ESG group a number of companies have put in place initiatives to improve their and their employees’ social position by improved training programmes, performance management systems and improved career development practices.

New Look In 2012 the company completed 70 projects to meet its key objective of improving wages and working conditions for workers, reaching 1,046 factories and 603,808 workers. This included training 121 factories across 6 countries on health and safety and delivering wage improvements in 119 factories. Key highlights include: 11 of the factories in India and Bangladesh participated in the Benefits for Business and Workers programme. In Bangladesh, monthly pay increased by 4.62%, equivalent to an increase in annual pay of £529,000 across all the workers employed in these factories. And in India monthly pay increased by 5.09%,

$

of the Apax Partners portfolio

Breakdown of employees

16 companies account for 30% of employees

1 3 52 4 66

4,900 work related accidents5.75 sick days per FTE / year

Examples of social impact initiatives

Improving wages and working conditions

equivalent to an increase in annual pay of £614,000 across the workers employed in these factories.

54% female 46% male

Gender balanceThe workforce was split 54% female and 46% male at year-end 2012, with 34% of companies reporting having a diversity policy in place. 14 companies reported having employee representation in place and 85% reported compliance with local labour regulations.

166,000full time employees

(FTEs) in the Apax ESG Group in 2012



Implementing a Global Compliance DashboardiGATE In order to ensure good corporate governance iGate has initiated a robust and comprehensive Global Compliance Dashboard, an integrated web based online system, customized for the iGATE environment in order to manage compliances on time. The Global Compliance Dashboard helps to identify statutory obligations and avoid financial loss/penalties incurred/imposed due to failure in adherence of compliance deadlines. It does this by sending timely alerts prior to the compliance due date to various process owners across functions, locations and also sends alerts to respective managers to allow them to complete compliance tasks within statutory deadlines. iGATE recognizes that Compliance management is a critical component of the internal control process for any business and a prerequisite for assessing compliance with corporate performance standards.

Improving policies and guidelinesCapio In the last 12 months Capio Group implemented a whistle blower policy and developed general anti-bribery and anti-corruption guidelines for the Capio Group; the Group also developed a new policy for the prevention, deterrence and detection of bribery and corruption of Capio in Sweden.

GHG In 2012, GHG created a Health & Safety and Non-Clinical Risk Committee which reports directly to the company’s Leadership Team (executive management) and which deals with all health and safety matters and non-clinical risk that GHG is exposed to.

What is the anti-corruption practice of the company?

(e.g. Policies, training, procedures, whistle blowing hotlines)

Are there supply chain due diligence policies in place?

Does the company have appropriate ethical conduct codes of practice?

What is the composition of the Board of Directors?

(e.g. How many independents?)

Governance summaryAt Apax we realise that good corporate governance is the foundation of effective corporate management. For us, corporate governance means the application of international and national values and principles of responsible and transparent company management and control that are geared towards sustainable added value. We target full compliance with the laws and regulations of each country in which we operate, as well as with international standards. It is the necessary condition for our engagement with society. We are convinced that good corporate governance strengthens the trust placed in our portfolio companies by their business partners and

Psagot achieved a maximum “platinum” rating in the Israeli Ma’ala ranking. Psagot is the only private company in the insurance and finance sector in Israel to have received this rating. The score that the company was awarded in 2012 is higher than the average in the category. Ma’ala is Israel’s leading advocate for CSR and good corporate citizenship.

New Look won PETA UK’s Most Stylish Women’s Vegan Outerwear Award, which aims to showcase the best cruelty-free contributions to the fashion world. New Look also won the Global Sustainability TVE film awards 2012 in the Good Governance category for its film about the company’s work to improve conditions and wages in a factory in Bangladesh. (See page 08)

employees and also by our institutional investors. Robust corporate governance systems are in place across the Apax ESG group. Almost all companies have a code of conduct and/or a code of ethics which guides their business activities. All companies have anti-corruption/anti-competition processes in place which are monitored regularly. Portfolio companies that are new to Apax or which have historically had less focus on governance are actively encouraged to adopt appropriate codes and processes.

Anti‑corruptionDuring the year, no public allegations of corruption were made against any of our portfolio companies or their employees.

Public recognition A number of the Apax portfolio companies received public recognition for their activities and focus on corporate citizenship:

Governanceof the Apax Partners portfolio

Examples of governance KPIs Examples of corporate governance initiativesOverview of compliance and policies

Compliance

PoliciesAnnual CSR Report 26%

Waste Management Policy 29%

Environmental Policy 36%

Diversity Policy 36%

Corporate Governance Policy 59%

Health & Safety Policy 68%

Anti-corruption & anti-competitive conduct policies 79%

Code of Conduct/Ethics 80%

Compliance with all local environmental regulations 96%

Compliance with all materially relevant local labour regulations 85%

Monitoring of compliance with compliance policies and procedures 79%

Anti-corruption protections included in 3rd party contracts 74%

Sub-contractors adherence to environmental guidelines 29%

Board reports on the main environmental risks & impacts 18%

Fines paid for health & safety noncompliance LTM 5%

Subject/target of investigation relating to anti-corruption conduct laws LTM 0%

LTM serious environmental incidents 0%



31 December 2012 CO2 Anti‑ emissions Electricity Water Waste Serious Employees Women Men Diversity Sick days Voluntary Workers Code of corruption CSR Company Sub‑sector (tons) (Kwh) (m3) (tons) incidents FTEs % % policy (FTEs) turnover Council conduct policy prReport

ConsumerCompany A Consumer Goods 248,367 200,000,000 4,000,000 20,311 No 4,095 24 76 No 4,473 384 Yes Yes No No

Company B Gaming 11,305 18,261,567 26,938 39 No 1,476 41 59 No 9,669 63 Yes Yes Yes Yes

Company C Online 2,906 1,458,613 – – No 1,213 44 56 No 337 191 No No No No

Company D Retail 104,586 193,477,851 177,977 4,669 No 7,612 78 22 Yes 43,049 – Yes Yes Yes Yes

Company E Retail 9,903 21,602,141 – – No 16,886 93 7 No 50,648 – No Yes Yes Yes

Company F Retail 6,736 52,422,229 335,518 8 No 1,224 68 32 No 23,068 50 Yes Yes Yes No

Company G Consumer Goods 40,210 39,420,000 1,550 11 No 5,031 41 59 No 4,986 – Yes No Yes No

Company H (1) Retail – – – – – 12,665 – – Yes – – – Yes No No

Healthcare

Company I Hospitals – – – – No 10,142 82 18 Yes – – Yes Yes Yes No

Company J Hospitals 51,825 59,612,242 343,497 2,996 No 7,791 78 22 Yes 44,115 1,722 No Yes Yes Yes

Company K Medical Products 45,843 57,015,067 33,236 453 No 5,092 51 49 Yes 7,870 1,784 Yes Yes Yes No

Company L (1) HC Services – – – – No 2,700 74 26 Yes 5,338 160 – Yes Yes No

Company M HC Services – – – – No 4,146 79 21 Yes – 62 No Yes Yes No

Services

Company N (1) Business Services 98,879 77,900,000 – – No 27,259 23 77 Yes 12,777 3,666 No Yes Yes No

Company O (1) Business Services – – – – No 425 20 80 No 2,130 18 – Yes No No

Company P Financial Services 19,496 23,805,843 74,734 – No 6,290 61 39 No – 1,946 Yes Yes Yes No

Company Q Financial Services 2,916 2,161,999 1,976 22 No 730 47 53 Yes 6,052 120 No Yes Yes Yes

Company R Financial Services 106 475,050 7,906 – No 100 50 50 No 600 3 Yes Yes Yes No

Company S Business Services – – – – No 592 42 58 No 1,659 126 Yes Yes Yes No

Tech & Telecom Company T IT Services 108,363 75,986,905 – – No 27,554 26 74 No – 4,384 No Yes Yes Yes

Company U IT Services 11,170 72,653,777 273,391 – No 28,385 70 30 No 287,962 20,275 Yes Yes Yes No

Company V (1) IT Services – – – – No 1,995 23 77 Yes 1,374 414 – Yes Yes No

Company W Software 63,465 26,285,375 3,603 – No 4,572 34 66 No – 445 Yes Yes Yes No

Company X Software 3,394 4,858,885 4,934 1 No 180 17 83 Yes 786 33 No Yes Yes No

Company Y Software – – – – No 646 67 33 No – 68 Yes Yes Yes No

Company Z Telecoms 973 – 8,085 55 No 1,096 64 36 No 9,032 138 Yes Yes Yes No

(1) Investments completed in 2013 did not participate in the KPI collection; inputted values derived from the pre-investment ESG due diligence. (2) Only those portfolio companies which participated in the KPI collection exercise are featured in the performance data overview together with those companies for which pre-investment due diligence was performed in 2013

Environmental Social Governance

2012 ESG performance data:(1)(2) by Sector



(1) Investments completed in 2013 did not participate in the KPI collection; inputted values derived from the pre-investment ESG due diligence. (2) Only those portfolio companies which participated in the KPI collection exercise are featured in the performance data overview together with those companies for which pre-investment due diligence was performed in 2013

31 December 2012 CO2 Anti‑ emissions Electricity Water Waste Serious Employees Women Men Diversity Sick days Voluntary Workers code of corruption CSRCompany Sector (tons) (Kwh) (m3) (tons) incidents FTEs % % policy (FTEs) turnover Council conduct policy prReport

Apax VIII (1)

Company O Services – – – – No 425 20 80 No 2,130 18 – Yes No No

Company N Services 98,879 77,900,000 – – No 27,259 23 77 Yes 12,777 3,666 No Yes Yes No

Company V Tech & Telco – – – – No 1,995 23 77 Yes 1,374 414 – Yes Yes No

Company L Healthcare – – – – No 2,700 74 26 Yes 5,338 160 – Yes Yes No

Company H Consumer – – – – – 12,665 – – Yes – – – Yes No No

Apax Europe VIICompany A Consumer 248,367 200,000,000 4,000,000 20,311 No 4,095 24 76 No 4,473 384 Yes Yes No No

Company E Consumer 9,903 21,602,141 – – No 16,886 93 7 No 50,648 – No Yes Yes Yes

Company F Consumer 6,736 52,422,229 335,518 8 No 1,224 68 32 No 23,068 50 Yes Yes Yes No

Company C Consumer 2,906 1,458,613 – – No 1,213 44 56 No 337 191 No No No No

Company G Consumer 40,210 39,420,000 1,550 11 No 5,031 41 59 No 4,986 – Yes No Yes No

Company L Healthcare – – – – No 2,700 74 26 Yes 5,338 160 – Yes Yes No

Company K Healthcare 45,843 57,015,067 33,236 453 No 5,092 51 49 Yes 7,870 1,784 Yes Yes Yes No

Company O Services – – – – No 425 20 80 No 2,130 18 – Yes No No

Company Q Services 2,916 2,161,999 1,976 22 No 730 47 53 Yes 6,052 120 No Yes Yes Yes

Company S Services – – – – No 592 42 58 No 1,659 126 Yes Yes Yes No

Company Z Tech & Telco 973 – 8,085 55 No 1,096 64 36 No 9,032 138 Yes Yes Yes No

Company T Tech & Telco 108,363 75,986,905 – – No 27,554 26 74 No – 4,384 No Yes Yes Yes

Company W Tech & Telco 63,465 26,285,375 3,603 – No 4,572 34 66 No – 445 Yes Yes Yes No

Company U Tech & Telco 11,170 72,653,777 273,391 – No 28,385 70 30 No 287,962 20,275 Yes Yes Yes No

Company X Tech & Telco 3,394 4,858,885 4,934 1 No 180 17 83 Yes 786 33 No Yes Yes No

Company Y Tech & Telco – – – – No 646 67 33 No – 68 Yes Yes Yes No

Apax Europe VICompany G Consumer 40,210 39,420,000 1,550 11 No 5,031 41 59 No 4,986 – Yes No Yes No

Company B Consumer 11,305 18,261,567 26,938 39 No 1,476 41 59 No 9,669 63 Yes Yes Yes Yes

Company E Consumer 9,903 21,602,141 – – No 16,886 93 7 No 50,648 – No Yes Yes Yes

Company M Healthcare – – – – No 4,146 80 20 Yes – 62 No Yes Yes No

Company J Healthcare 51,825 59,612,242 343,497 2,996 No 7,791 78 22 Yes 44,115 1,722 No Yes Yes Yes

Company I Healthcare – – – – No 10,142 82 18 Yes – – Yes Yes Yes No

Company R Services 106 475,050 7,906 – No 100 50 50 No 600 3 Yes Yes Yes No

Company P Services 19,496 23,805,843 74,734 – No 6,290 61 39 No – 1,946 Yes Yes Yes No

Company S Services – – – – No 592 42 58 No 1,659 126 Yes Yes Yes No

Company U Tech & Telco 11,170 72,653,777 273,391 – No 28,385 70 30 No 287,962 20,275 Yes Yes Yes No

Company T Tech & Telco 108,363 75,986,905 – – No 27,554 26 74 No – 4,384 No Yes Yes Yes

Company X Tech & Telco 3,394 4,858,885 4,934 1 No 180 17 83 Yes 786 33 No Yes Yes No

Company W Tech & Telco 63,465 26,285,375 3,603 – No 4,572 34 66 No – 445 Yes Yes Yes No

Apax Europe VCompany D Consumer 104,586 193,477,851 177,977 4,669 No 7,612 78 22 Yes 43,049 – Yes Yes Yes Yes

Company P Services 19,496 23,805,843 74,734 – No 6,290 61 39 No – 1,946 Yes Yes Yes No

;(1) Investments completed in 2013 did not participate in the KPI collection; inputted values derived from the pre-investment ESG due diligence. (2) Only those portfolio companies which participated in the KPI collection exercise are featured in the performance data overview together with those companies for which pre-investment due diligence was performed in 2013

Environmental Social Governance

2012 ESG performance data:(1)(2) by Fund



Case Study:

In May 2010, Apax Partners Funds completed their first investment in Brazil when they de-listed TIVIT, a leading integrated IT and Business Process Outsourcing supplier in Latin America.

As with all Apax investments completed after 2010, the investment was subject to a rigorous screening process by PwC, which took place between signing and final completion. Because the sectors in which Apax invests typically have a relatively ‘light’ environmental impact, the screening process is purpose built to explore risks and opportunities across the whole Environmental, Social and Governance spectrum.

In the case of TIVIT, major opportunities and risks that were identified included:

Opportunities

Energy Efficiency

Sustainable Procurement

Sustainability Management Structure

Employee Engagement Programme

Environmental - Biodiesel

Sustainability KPIs

Risks

Environmental - Contamination

Health & Safety

Governance Controls Failure

Staff Satisfaction

Health & Safety

Supply Chain

Converting Data Centres to sustainable bio-diesel

Carbon reduction

Establishing guidelines for environmental best practice

Recycling hardware from data centres

Ensuring that 100% of sourcing is from sustainable suppliers

Investing in the working environment for employees in order to reduce absenteeism and staff turnover

Implementing governance structure around sustainability

As TIVIT is a large company that was formed as the result of many mergers, one of the first challenges was to assess what was already being done, introduce best-practice guidelines and identify areas where quantifiable savings could be achieved.

Specific areas where the management team identified the potential for measurable improvements include:

While it is still relatively early days for the investment, the management team has embraced the findings of the initial PwC report and has identified the areas on which it will focus over the life of the investment. The long-term nature of the private equity model is ideal for monitoring performance against these benchmarks and establishing metrics to which the management team can be held accountable. In the long-run, we believe that this process will lead to stronger performance for TIVIT, for the world in which it operates and for our investors. For more information please visit www.apax.com/our-culture

Right: Extract from the independent ESG screen conducted on TIVIT by PwC

Photograph: Server rooms at TIVIT

Case Study:




Opportunities

Energy Efficiency





Sustainability KPIs

Risks


Health & Safety


Staff Satisfaction

Health & Safety

Supply Chain


Carbon reduction











Case Study:




Opportunities

Energy Efficiency





Sustainability KPIs

Risks


Health & Safety


Staff Satisfaction

Health & Safety

Supply Chain


Carbon reduction











Case study

Overview


Opportunities

Energy Efficiency




Environmental – Biodiesel

Sustainability KPIs


Carbon reduction






Risks

Environmental – Contamination

Health & Safety


Staff Satisfaction

Health & Safety

Supply Chain

In the case of TIVIT, major ESG opportunities and risks that were identified at the time of the investment were included:


The management team has embraced the findings of the pre-investment analysis and has identified the areas on which it will focus over the life of the investment. The long-term nature of the private equity model is ideal for monitoring performance against these benchmarks and establishing metrics to which the management team can be held accountable. In the long-run, we believe that this process will lead to stronger performance for TIVIT, for the world in which it operates and for our investors.




The Apax Foundation and the Apax U.S. Foundation are the channels for Apax Partners’ corporate giving globally and have made donations averaging over £1 million a year since the Foundations’ inception in 2006.

Social entrepreneurship was chosen as the focus for the Apax Foundations’ major grant giving as it is the natural extension of what Apax does commercially and builds on the Firm’s history of support in that area, most notably as one of the founders of Bridges Ventures. It is also an area where some of the Foundations’ Trustees have significant experience. This provides us with a steady flow of introductions to leading charities in the field, both from within the firm and fromour wider network.

The Foundations have also continued their commitment to our staff ‘matching’ scheme and the private equity community’s collective charity, Impetus – The Private Equity Foundation.

Striving to make a positive contribution

Apax Foundation

Social entrepreneurship

Social entrepreneurship is the main focus of the Apax Foundation’s charitable giving. We support a range of charities, large and small, working to help people in deprived communities to lift themselves out of poverty through enterprise. The Apax Foundation has made total cumulative donations of £3 million to charities working in this field.

Apax staff ‘matching’ scheme

Our matching scheme is designed to encourage and support our team’s personal involvement with charities close to their hearts. The Apax Foundation has made total cumulative donations of £1.4 million to charities to which members of the Apax team have given their time and skills.

Impetus – The Private Equity Foundation

Impetus – PEF accelerates the growth of innovative charities and social enterprises helping disadvantaged children and young people to get the start in life they deserve.

Social investments

A proportion of the Foundation’s invested endowment fund is allocated to social investments - in other words, investments that generate a positive social impact as well as a financial return. The most significant of these is Finance in Motion, whose mandates include the European Fund for Southeast Europe (EFSE) and the Green for Growth Fund Southeast Europe.

Trustees of TheFoundationThe Apax Foundation is chaired by Sir Ronald Cohen and its Trustees include:

Simon CresswellPartner, General Counsel Apax Partners

Peter EnglanderCEO of the Apax Foundation

Martin HalusaChairman, Apax Partners

David MarksSenior Taxation Advisor, Apax Partners

John MegrueChairman, Apax Partners

U.S.

Shashank SinghPartner, Apax Partners

Michael PhillipsPartner, Apax Partners

Mitch TruwitCo CEO, Apax Partners


Emmaus UK

Emmaus is an international movement which creates communities for the homeless, offering them a home, work and the chance to rebuild their lives in a supportive family environment. The communities aim to be self-sustaining through their on-site enterprises, such as restoring and re-selling used furniture and electrical goods.

Grameen America North America

Grameen America is a not-for-profit microfinance organisation founded by Nobel Laureate Prof. Muhammad Yunus, providing small loans to people of limited means in the US to enable them to start up their own small businesses. The Grameen concept, which specifically aims to help the poorest, is new to the U.S. and the Apax Foundation was one of its early backers.

Ashoka 3 years Germany

Emmaus 3 years initially followed by 2-year re-commitment UK

Grameen America 3 years initially followed by 3-year re-commitment US

INSEAD Social Entrepreneurship Programme 2 years France/Singapore

Joblinge 1 year initially followed by 3-year re-commitment Germany

Millennium Promise 3 years Africa

Mosaic 3 years initially followed by rolling 1-year re-commitment UK

Non-Profit Incubator / Xingeng Workshop 3 years China

Opportunity Network 3 years US

Prince’s Trust 1 year UK

Shivia 3 years India

Social Finance 2 years UK

Trickle Up 1 year initially followed by India, 2-year re-commitment West Africa, Central America

Charity Period Country

Joblinge Germany

Joblinge works to reduce youth unemployment in Germany through a 6-month programme targeting unemployed high school leavers. Joblinge targets the most challenging cases, who have already been through government training schemes without success. Its programme consists of training, intense mentoring, internships and ongoing coaching throughout the participants’ apprenticeship, with a job placement as the final aim. The programme has proved 4-6 times more effective than comparable government schemes.

Millennium Promise Africa

Millennium Promise’s goal is to halve extreme poverty in Africa by 2015. Its flagship initiative is the Millennium Villages project which operates in 80 villages across ten countries in sub-Saharan Africa, reaching over 500,000 people. The Apax U.S. Foundation’s donation funds the new post of Director of Business Development, with a remit to help create sustainable enterprises in the villages to secure a stable future for the inhabitants.

Apax Foundation continued

The Apax Foundation’s social entrepreneurship portfolio emcompasses a mix of enterprising start-ups and larger, more established organisations. We look to fund projects that will bring lasting economic and social benefits, and to support charities in all the regions in which Apax operates.

Social entrepreneurship examples

Social entrepreneurship


Values across the Apax Partners portfolio

Portfolio companies are encouraged to lead in corporate social responsibility, because we believe that sustainably run businesses ultimately help drive better returns for our investors.

We are proud of what we do: backing management to release the full potential of their businesses through insight and patient long-term investment. We remain aware of our responsibilities at all times, and are guided by our values.

Shaping our industry’s values

We are committed to working with the industry on corporate responsibility issues including environmental, social and governance best practice, as well as raising the standard of transparency and disclosure to all our stakeholders. As such, we were engaged from the earliest stages in the development of the Walker Guidelines on Transparency and Disclosure in the UK, and are involved with industry associations in other countries in their creation of similar codes.

We are proud signatories of the UN’s Principles for Responsible Investment (UNPRI) and to the Private Equity Growth Capital Council’s Guidelines for Responsible Investment.

See the UNPRI website for full details at www.unpri.org

See the Private Equity Growth Capital Council website for the full list at www.pegcc.org

Our valuesOur shared investment values

Our values are built on five key pillars

Integrity Apply the highest standards of integrity in dealings with all stakeholders.

Stewardship Act in the long-term interests of the environment and the companies in which our funds invest.

Community Act with respect and consideration for the communities in which we operate.

Relationships Create long-term relationships founded on mutual advantage.

People Treat people with dignity and respect. Do not discriminate on any grounds.

Overview

Private equity is a long-term business, and depends on the trust it receives from investors, business owners and management teams. Our values are crucial in everything we do.

We apply our values equally wherever we operate. They inform our interactions with employees, suppliers and our local communities, as well as the Apax Funds’ investors and portfolio companies. Apax Funds do not invest in companies involved in firearms, pornography or that derive significant revenues from the production or sale of tobacco.


The findings from our ESG performance review will help put in place action plans for improvement for those companies where it is required, or identify companies which can benefit from sharing best practices with other Apax Partners portfolio companies.

By 2015 we aim to have engaged

of the Apax Partners portfolio in the measurement of their environmental, social and governance impact.

Conclusion

100%Find out more at www.apax.com/responsibility

Sustainability reporting across the Apax Partners portfolio

1

CSRCorporate SoCial reSponSibility

2012

N E W L O O K E T H I C A L

T R A D E R E P O R T

2 0 1 2 – 2 0 1 3

Everybody wants to look good.

Social RepoRt 2012

Read more Read more Read more Read more Read more

Continuing the journey


Designed and produced by Friend. www.friendstudio.com

gn asi e el R potential sustainably - Apax Partners · In 2009, we adopted the Private Equity...

Documents

Transcript of gn asi e el R potential sustainably - Apax Partners · In 2009, we adopted the Private Equity...