The following policies and procedures govern the voting of securities by the Company for accounts over which the Company has discretionary authority as well as securities held by investment funds managed by the Company. The policies and procedures also will apply in the case of recommendations that the Company provides to clients for non-discretionary accounts on matters for which a vote is requested. The Company has adopted separate proxy voting policies covering unlisted securities and publicly traded securities as detailed below.
- Unlisted Securities
- Purpose and Scope. The principal purpose of these voting policies and procedures is to ensure that all client securities are voted in the best interests of the client. The Company defines “best interests” to mean the best economic interests of the shareholders or partners of the client or, in the case of an employee pension plan, the beneficiaries of the plan. Since the Company is exclusively an alternative investment adviser, it does not invest or recommend investments in publicly traded securities. Consequently, the Company does not receive or analyze proxy statements issued by public companies with regard to such matters as the election of directors, approval of auditors, executive compensation, anti-takeover provisions or similar corporate matters. The Company invests its clients’ capital and the capital of investors in the limited partnerships that it manages primarily in private equity limited partnerships. These limited partnerships invest the substantial majority of their capital in privately held companies and, to a lesser extent, in public companies. The Company also may co-invest or directly invest a portion of such capital directly into private companies along with other investors, which typically include investment funds and their managers. As a result, nearly all of the securities for which the Company has discretionary voting authority are limited partnership interests, with the balance being comprised of debt and equity securities issued by private companies.
In most cases, the Company is requested to vote on proposed amendments to limited partnership agreements or to consent to the general partner of a limited partnership taking certain action that is not permitted under the partnership agreement. Such matters may include, for example, extending the term of the partnership, reducing the total capital commitments to the partnership, restructuring the general partner’s management fee, or making an investment that is outside the limitations set forth in the partnership agreement. In the case of co/direct investments, the Company may be requested to vote on changes to the terms of an indenture governing debt securities or changes to a company’s bylaws.
In all cases, the Company will endeavor to vote the securities in the best interests of the client or, in the case of a limited partnership managed by the Company, the limited partners in the partnership. In exercising its voting authority, the Company will take into account such factors as the Investment Committee, Allocation Committee, Head of Investments, senior investment professionals and Relationship Managers deem relevant to the client’s economic interests, including but not limited to, the investment guidelines of the applicable client or managed fund, the current state of the client’s or fund’s portfolio, current market terms and conditions (i.e., whether or not a requested amendment or consent to take action is consistent with the then prevailing terms or practice for similar funds or companies), and the performance of the fund managers or company management. In the case of direct investments, shareholders of the portfolio company often enter into a shareholders agreement, which governs how they vote with respect to particular issues, such as the election of directors. In such cases, the Company will be required to vote shares in accordance with such agreements as well as the factors noted above.
Since there are many factors that influence voting decisions and since there are many different types of issues for which general partners request amendments to, or consents under, partnership agreements, the Company has not established a list of “typical” issues that it will vote for or against. For example, the decision of whether or not to approve the extension of the term of a limited partnership will depend on the specific facts and circumstances, such as the partnership’s performance to date, the strength of the general partner’s management team and the overall condition of the portfolio. The Company’s policy is to review each proposal on its own merits, taking into account all relevant factors, and not to follow inflexible rules with respect to any particular issue that may be presented for a vote. - Voting Responsibility. The applicable senior investment professionals and Relationship Managers together have the responsibility for voting securities over which the Company has discretionary authority. Proposed amendments or requests for consents initially are reviewed by the Company’s Legal Department or the Fund Investment Team legal group, which also reviews the applicable partnership agreement or corporate documents. Any issues are then discussed with the applicable senior investment professional and Relationship Manager for resolution prior to making a decision regarding the proposal. Depending upon the matter under consideration, the senior investment professionals or Relationship Managers may refer the matter to the Investment Committee for consideration. For example, a significant change in investment strategy or key personnel or other material change proposed by a fund manager should be referred to the Investment Committee.
- Conflicts of Interest. The Company does not, directly or indirectly through affiliated entities, provide services to the limited partnerships or companies in which its clients have invested or to their general partners or management. Consequently, the Company does not face the potential conflicts of interest faced by many investment advisers whose affiliates offer brokerage, underwriting or other services to companies soliciting proxies. Nonetheless, it is possible that the Company may develop business or personal relationships with persons who have an interest in the outcome of certain votes. In the event that a conflict of interest arises, the Relationship Manager will promptly inform the client of the conflict and all relevant information relating to the matter for which a vote is required. The Company will then vote only in accordance with the client’s instructions. If the Company does not receive instructions from the client, or if it is impractical to obtain such instructions, the Company will abstain from voting.
- Purpose and Scope. The principal purpose of these voting policies and procedures is to ensure that all client securities are voted in the best interests of the client. The Company defines “best interests” to mean the best economic interests of the shareholders or partners of the client or, in the case of an employee pension plan, the beneficiaries of the plan. Since the Company is exclusively an alternative investment adviser, it does not invest or recommend investments in publicly traded securities. Consequently, the Company does not receive or analyze proxy statements issued by public companies with regard to such matters as the election of directors, approval of auditors, executive compensation, anti-takeover provisions or similar corporate matters. The Company invests its clients’ capital and the capital of investors in the limited partnerships that it manages primarily in private equity limited partnerships. These limited partnerships invest the substantial majority of their capital in privately held companies and, to a lesser extent, in public companies. The Company also may co-invest or directly invest a portion of such capital directly into private companies along with other investors, which typically include investment funds and their managers. As a result, nearly all of the securities for which the Company has discretionary voting authority are limited partnership interests, with the balance being comprised of debt and equity securities issued by private companies.
- Publicly Traded Securities.
- Purpose and Scope. Generally the Company manages portfolios of unlisted private equity securities. The Company’s DM Business focuses on managing portfolios of publicly traded securities, which are generally equity securities. Due to the different nature of proxy questions and obligations between the two classes of securities, the Company has adopted a separate set of proxy voting procedures for accounts managed by the DM Business.
- Voting Responsibility. Most of the DM Business investment advisory contracts grant the Company the exclusive right to vote proxies on its clients’ behalf. Clients may decide to retain proxy voting authority if they so desire. Any specific instructions from clients relating to proxy voting will be documented in the applicable investment advisory contracts.
- Voting Agent. The Company has retained Risk Metrics/Institutional Shareholder Services (“ISS”), a proxy voting and consulting firm, to serve as the Company’s voting agent with respect to publicly traded securities and to receive proxy voting statements, provide information and research, make proxy voting recommendations, and handle various administrative functions associated with the voting of client proxies. The proxy voting guidelines for U.S. proxies are set forth in the ISS Proxy Voting Guidelines Summary and the ISS Concise Proxy Voting Guidelines. These summaries are a condensed version of all proxy voting recommendations contained in the ISS Proxy Voting Manual. While ISS makes the proxy voting recommendations, the Company retains the ultimate authority on how to vote. It is anticipated that the Company will be in agreement with ISS recommendations and no other action may be required.
- Voting Records. The Company will maintain the following records under these policies and procedures:
- A copy of all policies and procedures;
- A copy of each document (including proxy statements, if any) that the Company receives relating to the voting of clients’ securities;
- A record of each vote cast by the Company on behalf of a client;
- A copy of each document created by the Company that was material to making a decision on how to vote client securities or that memorialize the basis for that decision; and
- A copy of each written request from a client for information on how the Company voted on behalf of the client, and a copy of any written response by the Company to any (written or oral) client request for such information. The Company will retain the records described above for such period of time as is required to comply with applicable laws and regulations.
- Disclosure to Clients.
A copy of these policies and procedures will be provided to clients upon request. In addition, copies of the records described above that relate to a particular client will be provided to such clients upon request.
Revised 04/27/2023