(Bloomberg) -- A private equity firm in Helsinki has developed a strategy it says clearly reduces environmental, social and governance risks.
Julianna Borsos, chief executive of Bocap Private Equity, says she targets small and medium-sized companies that are between two and 10 years old. The idea is to select firms that “are not burdened by history,” she said in an interview.
As asset managers everywhere try to adapt to investor and regulatory demands for cleaner portfolios, figuring out how to avoid ESG pitfalls is key to staying in business. At Bocap, the view is that new companies don’t represent the same legacy risks when it comes to issues like carbon emissions or gender equality, because they were born in a more enlightened age.
“It’s in their DNA,” Borsos said.
Bocap’s newest fund -- Bocap SME Achievers Fund III Ky -- now manages 100 million euros ($122 million) in assets. More than half its portfolio companies have female chief financial officers, and women are heavily represented on boards and management teams, Borsos said. “Such successful companies are by definition almost automatically ESG compliant.”
Borsos says Bocap’s main focus is ensuring portfolio companies are on the right side of gender equality issues and don’t carry reputational risks. That’s particularly important for the health sector, she said.
Bocap targets minority stakes of 10-49%, with 20-35% representing its preferred ownership level. The firm’s next fund could be pan-Nordic, which is a move “we may consider in a few years,” Borsos said.
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