Our beliefs

Our mission is to produce the best risk-adjusted returns for our investors and to preserve their capital. From the outset we identified issues such as the climate emergency, labour conditions and business ethics as increasing risks to returns and our investors’ capital.

ESG issues have risen rapidly up the agenda of our investment partners. We work closely with our investors to discuss their priorities and how we can act upon them. You can read our responsible investment policy here.

We analyse ESG issues as part of our overall risk assessment for each investment. In doing so, we make more informed investment decisions, better protecting against losses, fulfilling our fiduciary duty to investors and protecting our firm’s reputation.  

We believe that directing capital towards borrowers willing to improve the sustainability of their practices may generate better outcomes than simply excluding investments on poor ESG grounds. This is why we pursue an ESG strategy of integration and engagement within our investment strategies. 

For each transaction we produce detailed analysis of ESG issues, and these are discussed by our internal ESG Deal Committee to guide investment decisions. Our ESG Deal Committee, made up of members of our investment, legal, investor relations and ESG teams, escalates ESG risks to our Investment Committee.  

How we do it

The firm’s ESG Steering Committee reviews Hayfin’s Responsible Investment policy and practices and develops our ESG strategy. This committee is made up of senior management and members of the investment, legal and business development teams. It reports periodically to the Executive Committee.  

We choose not to lend to companies in certain industries. In some sectors such as fossil fuels we may choose to engage with companies with the strongest ESG credentials and/or those that are committed to improving.  

As a lender we have less direct influence over the companies we invest in than holders of equity. But we regularly ask companies to improve their practices and we monitor all borrowers over the course of a loan.   

Some example actions we have taken include:  

• Regularly requesting more information from borrowers or sponsors so that we can make the most informed decision possible based on ESG principles.

• Offering companies a lower interest rate if they commit to reducing their energy use, where practicable and relevant.

• Applying pressure to healthcare companies over price increases when they are monopoly providers of a treatment.

• Pressing real estate companies to improve their practices on issues such as energy consumption, pollution, and biodiversity.

• Turning down an investment because of concerns about poor governance that were subsequently borne out.

• Holding managers of the vessels we invest in accountable in relation to improving working practices for crew members onboard.

• Retro-fitting vessels with sustainable features to help environmentally friendly operations. 

Our long-term vision and commitment to reliable returns and capital preservation are increasingly aligned with investors’ ESG priorities. We believe in actions not words, taking practical steps to remain a responsible investor. 

Regulatory and Responsible Investment-related documentation

Task Force for Climate-related Financial Disclosure (TCFD): Hayfin Capital Management LLP is required by UK regulation to publish its inaugural TCFD UK Entity Report. Please see Hayfin’s UK Entity Report here.

The UK Stewardship Code: Hayfin Capital Management (HCM) LLP has been a signatory to the UK Stewardship Code 2020 since 2021. The code sets a best practice standard across stewardship for asset managers investing on behalf of UK asset owners. As a signatory we report annually to demonstrate how we invest in line with the Code’s 12 Principles. Our latest submission report is available in full here.

Hayfin Emerald Management (“HEM”) LLP has not signed the Code but follows the same strategy for the effective stewardship of the assets under the management of HEM LLP as that of its affiliate, HCM LLP, which has signed the Code. In this respect, HEM LLP has adopted and complies with HCM LLP’s processes for ensuring that there is effective stewardship of the assets under HEM LLP’s management.

SFDR Entity-level Disclosure: Hayfin NV GP S.à r.l. is required to disclose in accordance with the European Sustainable Finance Disclosure Regulation (SFDR) Articles 3, 4 and 5 (including the associated Regulatory Technical Standards). Please see a full entity-level disclosure for Hayfin NV GP S.à r.l. here.