Environmental approach

We are mindful of the environmental impact of our business. We adopt the principle of “Reduce, Reuse, Recycle” to promote a healthy environment consistent with the size, location and available facilities in each of Advent’s offices globally.

Managing environmental risk

We identify, quantify and manage environmental risks as part of our overall investment strategy.

When we invested in Romanian pharmaceuticals manufacturer Terapia, we knew it had been run without appropriate regard for environmental hazards. After an explosion at one of its chemicals plants, the facility’s owners had simply shut the plant and left the issue for a future owner to address. We decommissioned, demolished and decontaminated the plant so the land and surrounding area could be used again with no residual pollution.

Our strategy of focusing on the core pharmaceuticals business also helped to clean up Terapia’s environmental record as it led to the winding down of the chemicals business, whose outdated manufacturing processes were a cause of environmental concern.

By the time we sold Terapia in 2006, we had improved the company strategically and environmentally, giving it a more stable and sustainable future.

Our involvement in society

Our ethos is one of a private partnership with offices around the world, where personal involvement and choice underpin our approach to the social causes we choose to support. We believe that if our employees are personally engaged with an organization or cause of their choice, both the employee and the organization or cause they decide to support will benefit. We support personal involvement in areas of social responsibility such as fundraising, voluntary work, mentoring, external appointments and memberships. In 2009, we inaugurated a bi-annual event, involving staff from all of our offices to raise funds for charity. In addition, some Advent offices take part in organized community programs such as Year Up in Boston (see the case study on p34).

Investment model

Advent International Corporation (AIC) is a fund manager. The majority of Advent offices around the world act as advisors to AIC, providing advice regarding the acquisition and disposal of portfolio companies.

AIC raises capital commitments privately for closed‑end funds, from qualified institutional investors globally. These closed-end funds are typically a limited partnership in which investors are limited partners. AIC receives an annual fee for managing the funds and a share of profits.

Regulation

AIC is regulated by the US Securities and Exchange Commission. Where applicable, our advisory businesses are registered with their local regulator, such as the Financial Services Authority in the UK, and we abide by their rules and disclosure requirements.

Risk management

AIC is advised by dedicated investment committees of local senior partners and at least one partner from another region. This model ensures the consistent application of global Advent standards and helps to enhance cooperation and knowledge sharing between regions, especially where investments involve more than one fund.

Each fund typically has a dedicated advisory committee of limited partner representatives who meet with us periodically to review the portfolio, discuss issues and opportunities, and monitor actions involving potential conflicts of interest and investments that would fall outside established investment guidelines.

A global compliance and risk management team led by our Chief Compliance Officer maintains policies and controls in this area and oversees our internal governance programs worldwide.

Talking to stakeholders

We attend portfolio company board meetings and are in contact with management at least weekly and often several times a day. We also maintain a continuous dialog with the limited partners who invest with us, our portfolio companies and their staff, intermediaries and the wider private equity community.

We provide our limited partners with regular communications on investment and exit activity and the progress of our portfolio companies. We send them quarterly fund financial reports, and hold an annual investor conference. Our investors can access information about our funds and their investments at any time through a secure extranet.

Improving portfolio company governance

We work in close partnership with management teams and are constantly thinking about how we can drive business improvements.

We encourage our portfolio companies to adopt appropriate corporate governance practices in line with established best practices and local legal and regulatory requirements. Corporate governance is often part of our value creation plans.

Responsible investing

We take our responsibilities towards our portfolio companies seriously. To achieve this requires the following:

• - Thinking long-term to foster sustainable growth and success of our portfolio companies
• - We consider environmental, society and governance issues throughout the due diligence process and in developing our investment thesis
• - We communicate with all stakeholders on a regular basis
• - We comply with laws, rules and regulations
• - We encourage the incorporation of best practice governance procedures

Transparency and disclosure

We follow the guidelines on transparency and disclosure for private equity firms produced by the Walker Working Group in the UK and the BVK Large Buy-Out Group in Germany.

For additional disclosures on investment activities in the UK and Germany that fall within these guidelines, please go to www.adventinternational.co.uk and www.adventinternational.de respectively.

We provide regular information to trade associations to assist them in analyzing the economic role and contribution of the private equity industry.