ESG & DEI
At OpenGate, we are committed to diversity, equality, and inclusion while being a responsible investor.
OpenGate Capital Management, LLC (“OpenGate”) believes that investing in companies and developing innovative approaches and focusing on operational excellence can be part of driving transformative investment value. In our experience, creating more resilient, compliant, and environmentally and socially responsible companies is often key to generating long-term value. Therefore, the considerations that are part of a robust Environmental, Social and Governance (“ESG”) strategy are important elements of our investment approach and process.
We recognize that the consideration of ESG factors have an impact on both the returns realized with respect to portfolio companies in which our funds invest as well as the communities in which our portfolio companies operate. We believe a well-defined ESG approach should have the goal of supporting sound ESG-related decision-making throughout the investment lifecycle, and where relevant, we actively seek to develop ESG strategies as a key element of our operational focus.
This Policy seeks to define OpenGate’s ESG process and philosophy, with guidance from the United Nations-supported Principles for Responsible Investment, the Value Reporting Foundation (formerly SASB), and the British Venture Capital Association (“BVCA”). OpenGate’s Responsible Investment Policy, adopted as of November 1, 2021 and updated as of July 1, 2023, applies uniformly throughout our portfolio companies within our active funds, where applicable. We proudly engage with our Limited Partners to power an ever-broadening dialogue on sustainability, responsibility, growth, and value.
As investors throughout the industrials, technology, and consumer and business services sectors, OpenGate draws upon a broad yet highly detailed base of operational expertise. Therefore, the ESG risks and opportunities we aim to consider in portfolio advancement cover a range of core business resilience and growth issues. The materiality of potential ESG factors is evaluated on a case-by-case basis.
Generally, OpenGate’s defined Core Areas of ESG Focus include (but are not limited to): Environmental Impact, Employee & Stakeholder Engagement, Business Integrity & Resilience, and Governance & Compliance.
OpenGate is structured with integrated, cross-functional deal teams that collaborate continuously throughout the process of sourcing, executing, and operating each investment. OpenGate’s investment professionals, including the M&A and Operations teams, bear the responsibility of providing effective ESG oversight, ensuring that all factors are diligently considered in potential investments.
With professionals focused on Business Development, M&A, and Operations, our goal is to position our investments for value creation from initial sourcing and diligence, throughout our hold period, and through to realization.
This specialized, collaborative investment structure also provides the opportunity for a seamless—though explicit— consideration of ESG factors throughout the life of a portfolio investment. In fact, where reasonable and appropriate, we evaluate and monitor ESG-related risks and opportunities within each portfolio investment at varying points in each stage of our investment process:
Sourcing |
Due Diligence |
Execution |
Holding Period & Value Creation |
Position for Realization & Exit |
|---|---|---|---|---|
Bus. Dev. |
Market intelligence
Proactive sourcing
Potential add-on analysis
|
Acquirer sourcing
|
Add-on sourcing and screening
Competitor analysis
On-going acquirer sourcing
|
Acquirer outreach
|
M&A |
Screening
|
Financial due diligence
Underwriting
Negotiations
Financing execution
|
Deal management
Refinancing
Add-on screening, due diligence, financing and execution
|
Exit planning
Negotiations
Execution
|
Operations |
Screening
|
Operational due diligence
Management team assessment
Transition
Value creation planning
|
Carve-out
Stabilize and manage costs
Drive growth
Pursue innovation
Integrate add-ons
|
Transition to new owner
|
The OpenGate investment approach is powered by individual accountability and forward-thinking action. We work to engage regularly with portfolio company management on key considerations around ESG advancement and best practice, with informal input from our Limited Partners on the ESG issues most meaningful to them. By striving to act as stewards of positive ESG orientation throughout our portfolio and with our LPs, we hope to further develop the consideration of responsible investment practices within the investment community while driving value within our own portfolio.
At the GP level, OpenGate has created a firm-wide initiative branded “OGCulture” which reflects this desired orientation towards sustainability and social and human capital through community and team initiatives. Besides seeking to align personal values with experiences and forge strong team bonds, OGCulture’s mission is to build relationships within our communities and partner with local and global charities. This approach fosters growth and development for our employees as well as contributes to our communities in a hands-on way.
OpenGate’s Responsible Investment Policy and the processes and philosophies contained herein have been developed utilizing a set of ESG principles to which we aspire in our business:
- Raise awareness and attention to environmental, public health, safety, labor, governance, and social issues
- Increase accessibility and engagement with relevant stakeholders
- Position portfolio companies for long-term sustainability, improving the performance of and minimizing the adverse impact on environmental and social factors
- Seek to use governance structures that provide appropriate levels of oversight to audit, risk management, and potential conflicts of interest
- Adopt compensation approaches that align the interests of owners and management
- Maintain policies and processes that create more compliant, legally responsible companies that prize the safety, health, and welfare of their workforce and the regulatory positioning of their businesses
- Respect the human rights and community welfare of those affected by our investment activities
- Encourage portfolio companies to advance these same principles in a way which is consistent with OpenGate’s fiduciary duties
These principles serve as the motivation behind our focus on ESG considerations and reflect the values of OpenGate’s senior leadership, Investment Committee, Business Development, M&A, and Operations teams. For us, true ESG focus requires constant evolution, and we will seek to continue evaluating and enhancing our practices in this area. This Policy has been reviewed and approved by the OpenGate Investment Committee, and it will be reviewed and updated annually going forward. OpenGate is committed to keeping our Limited Partners and our team aware of any material developments in our Responsible Investment Policy to continue to optimize transparency and communication around key ESG considerations.
Diversity, Equity & Inclusion Policy
At OpenGate, we recognize that diversity, equity, and inclusion are important parts of what makes us successful as individuals, an organization, and an industry. Our goal is to attract, develop, and retain the best possible talent. Talent that cuts across different backgrounds, genders, races, ethnicities, perspectives, and abilities. We are dedicated to building and maintaining an OpenGate community that is a reflection of our broader world, and we understand that by doing so, we are able to make the highest quality investments possible. Our DEI efforts are led by OpenGate’s Founder & Managing Partner, Andrew Nikou, who holds the organization accountable for living our values, not just reciting them. Read more about OGCulture here
We also know that we could be doing much more in this regard, and we are committed to increasing diversity, equity, and inclusion within our organization and the larger private equity industry. We are proud of the transatlantic organization we have built, but we approach DEI with humility, as we continue our journey toward a more equitable and inclusive culture. This is iterative work that we will continue to prioritize into the future.
Our Diversity, Equity, and Inclusion principles will continue to permeate our investment strategy, how we treat our employees, and how we give back to our community.
We are all in.
