Modern Slavery Act and Human Trafficking Statement
For the Fiscal year ended December 31, 2021.
Modern Slavery Act and Human Trafficking Statement (the Statement) provides an overview of our efforts to help eliminate the risk of modern slavery and human trafficking pursuant to Section 54 of the UK Modern Slavery Act of 2015 (MSA), the Australia Commonwealth Modern Slavery Act of 2018 and similar legislation enacted in other applicable jurisdictions. This Statement is made by GCM Grosvenor (the Firm) on behalf of GCM Investments UK LLP (GCM UK) and certain fund products organized or operating in Australia (GCM’s Australian entities). The Firm is committed to implementing and enforcing effective systems and controls to safeguard against slavery and human trafficking taking place anywhere in our operations or supply chains.
References in the Statement to “GCM Grosvenor”, “us”, “we” and “our” are references to the Firm and its subsidiaries.
II. THE FIRM
The Firm is a global alternative asset manager that invests on behalf of clients who seek allocations to alternative investments, such as hedge funds, private equity, real estate, and infrastructure. With approximately $72.1 billion in assets under management globally, we are part of one of the world’s largest and most diversified independent alternative asset management firms. GCM Grosvenor is headquartered in Chicago and has offices in New York, Toronto, Frankfurt, London, Tokyo, Hong Kong, and Seoul.
Positively affecting our industry and people’s lives has been a cornerstone of the Firm’s culture for decades, and this core value continues to shape the Firm. The Firm seeks to engrain a welcoming and inclusive environment for employees, constantly looking for ways to improve the communities in which we live and work.
III. SUPPLY CHAIN RISKS AND RISK ASSESSMENT
The Firm’s supply chain generally relates to the operations of the funds and entities managed or advised by the Firm, comprised of business and professional services organizations, including banks, fund administrators, information service providers, law and accounting firms, and consultants, and in addition to the goods and services used in the running of the Firm including for office services, computers, telecommunication, and other equipment, catering, stationery, and cleaning services. Our supply chain is relatively short and predominantly comprises of highly skilled professionals. Where possible, we build long-standing relationships with our key suppliers and seek to reasonably ensure that expectations of business behavior are clear and consistent. As a result, we believe that there is limited risk of slavery or human trafficking taking place within our operations or supply chains.
Certain sectors and industries may have higher modern slavery risks because of their characteristics, products, and processes. The underlying portfolio companies in which the Firm’s fund are invested in (i.e., the investment portfolio) may also be exposed to those sectors or industries. We recognize that these risks can manifest in various sectors regardless of geography. We consider the fact that our service providers are typically based in the UK, the US, and Western Europe, which do not have high estimated prevalence of modern slavery, reduces our exposure to modern slavery practices. However, the nature of risks will vary from company to company in that portfolio, and the Firm acknowledges that modern slavery is a potential risk in the supply chains of its portfolio companies.
IV. OUR ACTIONS
The Firm has taken steps to reasonably ensure that modern slavery and human trafficking are not taking place in our organization or supply chains, and we have integrated considerations on modern slavery and human trafficking risks within the evaluation and management of investments on behalf of ourselves and our clients
Our Code of Ethics describes the standards of behavior expected of our employees, including the maintenance of high ethical standards.
Our Reporting Violations, Misconduct, and Legal or Ethical Concerns Policy details the manner in which employees can confidentially raise any issues, which the Firm will investigate and deal with appropriately. We have provided both internal and external contacts for employees to use should they feel the need to raise concerns.
The Firm is dedicated to promoting an atmosphere of diversity and equal opportunity, and our Employee Handbook prohibits discrimination and harassment against individuals based on their actual or perceived race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status (including registered domestic partnership status), sex (including gender identity and expression), age, sexual orientation, military and veteran status, or any other characteristic protected by law.
Embedding ESG considerations into investment decisions
The Firm maintains an environmental, social, and governance (ESG) Policy demonstrating its commitment to investing responsibly, operating business with integrity, supporting environmental responsibility, and building a diverse and inclusive workplace where our employees can thrive. Given that ESG is a top Firm priority, the Office of the Chairman, the Firm’s most senior leaders, has ultimate governance over firmwide ESG matters and is responsible for establishing key strategic initiatives for the ESG Committee. The ESG Committee in turn has responsibility for translating the firmwide ESG initiatives into a formal ESG Policy, which is reviewed and updated annually and serves as a guide for activities and integration across the various business lines, including the Corporate Social Responsibility Team and Diversity, Equity, and Inclusion Committee. Other members of the ESG Committee include the Chief Investment Officer (CIO), senior investment professionals representing each asset class, and other key leaders.
Additionally, the Firm is a signatory to the United Nations Principles for Responsible Investment (PRI). As a PRI signatory, we incorporate ESG factors into our investment analysis and decision-making processes, which includes promotion of civil and human rights. This promotes upfront awareness of, and internal discussions on, potential issues from the initial screening stage. We request that investment managers and management teams provide updated responsible investing-related information in our year-end questionnaire, and we monitor ESG compliance regularly. The Firm has received an A+ PRI grading for our overarching approach to ESG strategy governance, and for ESG integration in private equity manager selection, approval, and monitoring.
We also share knowledge among industry colleagues and employees. We have educated clients on responsible investing and discussed with investment managers and industry peers how to become PRI signatories. We have also spoken at, or participated in, conferences to promote responsible investing.
We continue to broaden and enhance our efforts in ESG-related investing in a number of ways. To improve ESG transparency and reporting from managers, we are expanding the means by which we assess and track how managers fit into our ESG framework across our investment strategies. We are working to better define industry best practices by increasing our participation in the PRI initiatives. We have also expanded our involvement in ESG-related activities through increased conference participation and additional industry affiliations
Conducting due diligence and monitoring of suppliers
In summary, as part of our initiative to identify and manage risk:
We seek to continuously improve our systems to better (a) identify, assess, and monitor potential higher risk areas in our supply chains, (b) mitigate the risk of slavery and human trafficking occurring in our supply chains through enhanced contract term controls (to the extent appropriate and obtainable), (c) train our employees as to these risks and the need to manage them, and (d) protect whistle blowers.
The Firm performs due diligence on suppliers to assess their compliance with the MSA. We include standard questions and representations relating to MSA concerns in the due diligence questionnaire from prospective suppliers.
Conducting due diligence in the investment process
The Firm includes specific questions regarding modern slavery and human trafficking in its due diligence questionnaires with respect to most potential investments being evaluated, and each investment memo must contain a section dedicated to addressing level of ESG integration. Post-investment, the Firm is planning to implement ongoing monitoring and seeks to be engaged on ESG matters where it has a board seat or limited partner advisory committee membership. We also seek engagement with investment managers to advocate for and support their ESG process improvements.
V. GOVERNANCE AND TRAINING
Our Compliance Team takes primary responsibility for helping the Firm’s stakeholders and departments to implement the objectives considered in this Statement. We also expect our employees to be aware of our policies in this area and conduct themselves in an ethical and responsible way at all times. Compliance shall escalate, as necessary, any issues with respect to the MSA to the Operations Committee.
The Firm also has a Corporate Social Responsibility Team which is comprised of employees across disciplines, including executive leadership. The Team’s key responsibility is to manage how ESG considerations factor into operations decisions and our investment decision-making process. The Team also identifies initiatives and industry trends, develops recommendations and execution timelines, and monitors and reports on progress through key performance indicators. As a Firm, we seek to actively support and improve the communities in which our employees and clients live and work and also foster further diversity and inclusion.
For further information on our Corporate Social Responsibility Initiatives, please see our dedicated page here.
Compliance will aim to provide regular training as necessary to educate on the importance of implementing and enforcing effective systems to reasonably ensure slavery and human trafficking is not taking place in our supply chain during the next reporting period.
If issues are identified in relation to modern slavery and human trafficking, employees, suppliers, and portfolio managers are advised to immediately report to [email protected].
VI. CONSULTATION PROCESS
The Firm and related entities adopted a cross-functional approach to consultation and drafting of this Statement. Our Sustainability team, Due Diligence team, Investments team, Legal team, and Compliance team were consulted during the drafting process.
The Firm is at the early stages of its modern slavery reporting journey and is committed to developing its approach year on year. In doing so, it will work across its supply chain and with portfolio companies to mitigate, manage, and (where necessary) remediate the risk of modern slavery.
This Statement was approved prior to publication and will be updated annually.
Jonathan R. Levin
Date: June 30, 2022