Impact/ESG - Has anyone spent some time looking at this for Search Funds?

April 23, 2021

by an investor from Universidade Católica Portuguesa - Catolica Lisbon School of Business and Economics in Lisbon, Portugal

Trying to understand the impact of search funds, if relevant, from an ESG (Environmental, Social and Corporate Governance)/Impact perspective. Has anyone done/seen any work around this?

Many thanks

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Reply by an investor
from Dartmouth College in 80 S Main St, Hanover, NH 03755, USA

While Tuckerman Capital is not an "impact strategy" (we invest in support of independent sponsors in niche engineering driven product and service deals), we have invested in several businesses that have a "mission/purpose" orientation to their business strategies and broader stakeholder/sustainability based approaches to strategic development and governance (i.e. focus on needs of customers, employees, suppliers, communities, environment, etc. in addition to those of shareholders, rather than at the expense of shareholders). We've found these elements, when executed effectively in smaller companies, to be EXTRAORDINARILY additive to value creation outcomes as well as in reducing risks commonly found in smaller company investing. Happy to discuss our views and appreciate the dialogue. nick 'at' tuckermancapital 'dot' com

Reply by a professional
from William Mitchell College of Law in Minneapolis, MN, USA

Sorry for the late reply. The vast majority of my practice as a lawyer is in the ESG or Impact space. I work with companies, investors and searchers in this area. Because it is a relatively young space and broadly defined, I don't see many searchers "limiting" themselves to this area but its getting more active. there is still a strong sense that ESG means lower return which can limit investor interest and many companies that you might consider acquiring may not consider themselves as impact companies. Happy to discuss if interested.

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