Modern Slavery Act and Human Trafficking Statement
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2022
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2022
I. INTRODUCTION
This Modern Slavery Act and Human Trafficking Statement (the Statement) provides an overview of our efforts to help mitigate the risk of modern slavery and human trafficking pursuant to Section 54 of the UK Modern Slavery Act of 2015, 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) for the reporting period January 1, 2022 through December 31, 2022.
References in the Statement to “GCM Grosvenor”, “us”, “we” and “our” are references to the Firm and its subsidiaries.
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.
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 $75 billion in assets under management globally, we are 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, Sydney 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 foster 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
GCM Grosvenor recognizes that there is a risk that modern slavery practices exist in its supply chain. The Firm’s supply chain generally relates to the operations of firms servicing the funds and entities managed or advised by the Firm, composed of business and professional services organizations, including banks, fund administrators, information service providers, law and accounting firms, and consultants, as well as firms providing the goods and services used in the running of the Firm including office services, computers, telecommunication, and other equipment, catering, stationery, and cleaning services. Our supply chain is relatively short and predominantly consists of highly skilled professionals. Where possible, we build long-standing relationships with our key suppliers and seek to reasonably ensure that expectations of ethical business behavior are clear and consistent. As a result, we believe that there is limited risk of slavery or human rights abuses taking place within our operations or supply chains.
Certain sectors and industries may have higher modern slavery and human rights risks because of their characteristics, products, and processes. The underlying portfolio companies in which the Firm’s funds 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 and human rights abuses are potential risks in the supply chains of its portfolio companies.
IV. our actions
Incorporating policies
The Firm has taken steps to seek to prevent modern slavery and human rights abuses in our organization or supply chains, and we have integrated considerations on modern slavery and human rights 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 which provides a framework for how we apply ESG considerations regarding our business, how we engage with our communities, and how we pursue, evaluate, and implement investments. GCM Grosvenor views ESG considerations as a core value, which we embrace at every level of the organization. This philosophy drives us to invest responsibly, operate our business with integrity, and build a diverse and inclusive workplace where our employees can thrive and volunteer, providing resources for organizations that strengthen the communities where we live and work. As we view ESG and Impact as core components of the investment process, we have embedded ESG and Impact analysis into our existing investment process. Part of our investment team’s job is to perform ESG and Impact analysis and monitor for ESG and Impact features as part of their day to-day investment responsibilities.
Given that ESG and Impact are a top firm priority, the Office of the Chairman, the firm’s most senior leaders, has ultimate governance over firmwide ESG and Impact matters and is responsible for establishing key strategic initiatives for the ESG & Impact Committee and GCM Grosvenor’s Sustainability team. The ESG Committee in turn has responsibility for translating the firmwide ESG initiatives into a formal ESG Policy, which is reviewed and, if necessary, updated annually and serves as a guide for activities and integration across the various business lines. The ESG & Impact Committee includes our Managing Director of Sustainability, select members of the office of the Chairman, our Chief Investment Officer and Chief Risk Officer and senior investment professionals representing each asset class.
Additionally, the Firm is a signatory to the Principles for Responsible Investment (“PRI”) and accepts the PRI as a framework for appropriately considering ESG and Impact issues in our investment process, which includes promotion of civil and human rights. GCM Grosvenor and its affiliates have been signatories to the Principles for Responsible Investment (“PRI”) since 2012. This promotes upfront awareness of, and internal discussions on, potential issues from the initial investment 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. We seek the PRI’s assurance of our ESG and Impact policies and practices via its annual transparency report. In the PRI’s most recent assessment in 2021, we received four out of five stars for the Indirect – Private Equity category and three out of five stars for Indirect – Hedge Funds and Investment & Stewardship policy. Our status as a signatory to the PRI underscores our commitment.
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 are dedicated to using our scale to advance the industry by driving accountability among those with whom we invest, partnering with responsible investment organizations, hosting small and diverse manager conferences, and supporting the missions of diverse professionals’ organizations. 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 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 modern slavery laws. We include standard questions and representations relating to modern slavery and human rights concerns in the due diligence questionnaire we obtain from prospective suppliers.
Conducting due diligence in the investment process
The Firm includes specific questions regarding modern slavery and adverse human rights impacts in its due diligence questionnaires with respect to most potential investments being evaluated, and each internal investment memorandum must contain a section dedicated to addressing the investment’s level of ESG integration. Post-investment, the Firm implements 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 related to modern slavery to the Operations Committee.
Additionally, our Sustainability Team works in close partnership with our Chief Executive Officer, President and Chief Investment Officer to increase coordination and implementation of best practices across our firm. The Sustainability team is responsible for ensuring implementation of our firmwide ESG/Impact strategy, adoption of evolving industry best practices, and ESG/Impact integration across GCM Grosvenor. To drive integration across our teams, we have identified one or more senior professionals by asset class who partner closely with the Sustainability team to implement evolving best practices relative to ESG/Impact assessment and monitoring of our managers and portfolio companies. Lastly, GCM Grosvenor has a Corporate Social Responsibility Team overseen by our Head of Sustainability which promotes our responsible investment initiatives. The Corporate Social Responsibility Team supports ESG and Impact partnerships and reports on the firm’s progress through our Impact and Task Force on Climate-related Financial Disclosures (TCFD) reports.
For further information on our Corporate Social Responsibility Initiatives, please see our dedicated page here.
GCM employees receive training on various human rights issues such as economic sanctions, money laundering, and diversity and inclusion. Compliance will provide periodic training to educate employees on the importance of implementing and enforcing effective measures to reasonably ensure slavery and human trafficking are not taking place in our supply chain during the next reporting period. Additionally, employees will be trained to identify and know how to report and escalate potential modern slavery exposures relating to internal operations, supply chains, or investments.
If issues are identified in relation to modern slavery and human rights violations, 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 refining its approach. 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 and other human rights violations.
vii. approval
This Statement was approved prior to publication and will be updated annually.
Jonathan R. Levin
President
Date: June 30, 2023