2022 Firmwide Responsible Investment Policy
This policy outlines Angelo Gordon’s (the “Firm”) approach to responsible investment across its investment management platform and in its relationships with vendors, strategic business partners and operating partners. We expect this policy to evolve as the firm continues to grow and to expand its business activities, and it is therefore subject to periodic review and revision by the Firm’s Environmental, Social, and Governance (“ESG”) Committee.
Commitment to Responsible Investing
For over 30 years, Angelo Gordon’s investment approach has consistently relied on disciplined portfolio construction backed by rigorous research and a strong focus on capital preservation. Angelo Gordon is committed to investing responsibly and executes on this commitment by incorporating material ESG and reputational considerations into our investment management business and internal governance framework. We refer to this as “ESG Integration.”
ESG Integration aligns with the Firm’s long-standing investment philosophy and its fiduciary responsibilities by capturing a broader spectrum of potential risk and value drivers and enhancing risk-adjusted returns. We recognize the impact of material ESG factors on risk-adjusted returns may vary by strategy and asset class and, accordingly, we apply this Policy alongside the complementary ESG policies specific to each strategy.
Angelo Gordon is a signatory to the United Nations-supported Principles for Responsible Investment (“PRI”) and is committed to further developing its responsible investing philosophy long-term by, among other steps:
- Instituting sustainable governance and oversight processes for the management of material ESG factors;
- Continuing to incorporate material ESG factors into investment decision making and documenting those factors throughout the investment lifecycle;
- Building an ESG continuing education program across all business units and geographies;
- Seeking appropriate material ESG disclosures from investee entities;
- Engaging on ESG performance with operating partners, investment partners, and contractors in the firm’s investment value chain, when appropriate;
- Working with industry peers to further responsible investing and ESG integration principles; and
- Reporting to stakeholders on sustainability progress over time.
Angelo Gordon’s investment professionals seek to integrate material ESG factors throughout the lifecycle of an investment. As with all investment risk factors, Angelo Gordon investment professionals use their discretion to determine what ESG risks are “material” through the life of an investment. ESG integration is owned by each investment strategy, rather than being outsourced to an ESG team, as we believe our investment professionals are best positioned to evaluate the ESG-related risk and value drivers within the context of their individual strategies and objectives. It is important to note that the presence of one or more ESG-related issues will not preclude Angelo Gordon from making an investment. Angelo Gordon’s ESG Integration and the resulting conclusions are documented in Investment Committee memos as part of the formal investment decision-making process.
Credit Strategies. The Firm became an affiliate member of the Sustainability Accounting Standards Board (“SASB”) in 2019, and the SASB approach to materiality forms the basis of our ESG Integration across our credit strategies. Our investment professionals refer to SASB’s Materiality Map and supporting materials to guide them in identifying and assessing the impact that material ESG factors might have on the performance of an investment. Beyond SASB, our investment teams are empowered to identify additional ESG factors specific to their investments and to employ a strategy-specific approach to assessing idiosyncratic governance factors within the context of the relevant market, sector and asset class.
Real Estate Strategies. Historically, the Firm’s real estate investment teams have sought to mitigate ESG risks throughout their investment processes. Tenant demand for sustainable buildings and market pricing of ESG features is accelerating across real estate markets globally, and we believe our strategies are positioned to create positive ESG value while enhancing risk-adjusted returns and honoring our commitment to our investors. As such, our approach to ESG Integration involves both mitigating risk and identifying opportunities for strategic ESG value creation during the holding period and upon exit.
Arbitrage Strategies. The firm has limited exposure to short-term merger and convertibles arbitrage strategies. Material ESG factors are identified and monitored using an artificial intelligence-based ESG market sentiment platform.
Responsible Investing Governance
Firm Management. Angelo Gordon’s co-CEOs are responsible for oversight of our responsible investing practices and the Firm’s corporate commitments to sustainability. The co-CEOs, the COO and the General Counsel meet quarterly with the Head of ESG to discuss progress on responsible investing objectives. These meetings include reviewing material ESG events that occur among investments across the Firm’s investment management platform. ESG incidents that could represent a material reputational risk to the firm are referred to the Reputational Risk Committee. The Co-CEOs are responsible for reporting on relevant ESG matters to the Firm’s Partnership Advisory Board.
Head of ESG. The Head of ESG & Sustainable Investing Strategy collaborates with investment teams on the evolving design and implementation of ESG integration processes. The Head of ESG chairs the ESG Committee and is also responsible for ESG training and education across strategies and advising teams on ESG market and regulatory trends and risks relevant to their strategies. This role is additionally tasked with developing and implementing processes for identifying and monitoring ESG risks at the portfolio level as well as at the Firm level.
Portfolio Managers & Investment Professionals. Angelo Gordon’s investment professionals are ultimately responsible for ensuring ESG factors are appropriately identified, assessed, and documented throughout the investment lifecycle. In partnership with the Head of ESG, investment teams are also responsible for evolving their approaches to ESG Integration over time to capture emerging risk and value drivers within their strategies.
ESG Committee. Angelo Gordon’s ESG Committee oversees the integration of this ESG Policy into investment and management decisions. The Committee consists of a representative group of portfolio manager-level investment professionals and leaders of key support functions, including Legal & Compliance, Client Services, Information Technology, Human Resources, and Communications. The Committee, which meets quarterly, serves as a strategic advisory forum for the development and communication of firm-level and strategy-specific ESG integration initiatives. The Committee serves as a mechanism for ongoing engagement with key ESG stakeholders across the Firm and champions both implementation and reporting of ESG initiatives across strategies and geographies.
 We consider material ESG factors to be those that the “reasonable investor” would consider relevant to the “total mix” of information when making an investment decision. The firm’s investment professionals assess material ESG factors based on: 1) the probability that the factor will affect the performance of an investment and 2) the expected magnitude of the factor should it affect performance. We believe that materiality is dynamic and evolves as investor awareness and market pricing of ESG factors and trends accelerates. The assessment of material ESG factors remains at the sole discretion of the firm’s investment professionals.