ESG has been a foundational priority for BayPine from the start. ESG processes, structures and resources have been developed in tandem with the firm’s broader operational and investment infrastructure, not as a secondary consideration.
Led by private equity veterans David Roux, co-founder and former co-CEO and chairman of Silver Lake, and Anjan Mukherjee, former senior managing director at Blackstone, BayPine launched in 2020. It began building a robust ESG program within weeks. This included establishing an ESG committee consisting of senior firm leadership, external advisors and a comprehensive responsible investment policy aligned to the UN Principles for Responsible Investment.
Each investment is put through an extensive ESG review prior to acquisition. Once a portfolio company has been acquired, BayPine begins to partner with it to improve ESG performance and value creation in areas identified during and post due diligence.
BayPine works with its portfolio companies in a number of ways to help them reach ESG goals. For example, the deal team frequently holds calls with portfolio company management. Executives at portfolio companies are responsible for reporting on financial and operational key performance indicators, including ESG-related metrics and targets. These are presented to the firm’s investment and operating committees.
BayPine is also finalizing a standard suite of ESG metrics for all of its portfolio companies, alongside more bespoke and enterprise specific and material variables, that will be evaluated and shared. As consistent ESG metrics are measured across its portfolio, BayPine will be able to track aggregate changes during its ownership periods, identify leading and lagging performers, and design and implement portfolio-wide ESG initiatives, such as portfolio company roundtables and training.
BayPine’s commitment to ESG has also allowed it to develop responsible policies and practices governing firm-level activities. In the last year, it completed several ESG and DEI training programs.
From the get go, building sustainable and responsible businesses has been core to BayPine’s DNA and investment thesis. “To ensure that this is effectively executed on, and consistently improved upon, we found that creating an ESG infrastructure from day one matters,” explains Emily Henry, partner and head of investor relations. “We have also learned that as a relatively small, first-time fund, we can learn to punch above our weight by actively participating in industry-wide ESG forums and initiatives where we can gain access to the experience and resources of other firms.”
For our full 2022 Private Equity Innovators in ESG coverage, click here.