Leading global private markets investment management firm Hamilton Lane is at the forefront of driving the industry toward more sustainable investing practices. With $818 billion in assets under management and supervision from over 1,400 clients and investors,* the firm works with its general partners (GPs) to integrate ESG considerations into investment decisions.
Creating a simplified process for collecting responses to its annual ESG request for information (RFI) was critical for Hamilton Lane to engage GPs on key environmental, social, and governance topics. The annual RFI is one of several avenues the firm uses to engage with managers beyond new fundraises and informs the firm’s view on where the ESG landscape is on various issues and how focus has shifted year-over-year. Working with Novata’s data management platform and Customer Success team, the firm was able to develop a streamlined, scalable process to manage data from hundreds of GPs.
Evolving Manual Processes
Heading into the third year of sending its annual ESG RFI, the firm’s lean ESG team engaged Novata to help automate its processes. “In the past, a lot of manual processes were involved,” said August Koch, Senior Associate of ESG and Sustainability at Hamilton Lane. The firm would send an Excel template via email for GPs to complete and return. However, managing responses manually, including bounce backs, notices of changing contact information, and questions about metrics, as well as verifying information was a challenge.
The volume of disparate data sources also made analysis difficult. “Once we wanted to take on the analytics, then it was a complicated process to get all the correct metrics out. It wasn’t scalable at all,” August noted. With the firm’s GP base continuing to grow each year, the team needed an intuitive, sustainable, and centralized solution to collect, analyze, and store data from hundreds of GPs.
Optimizing Data Management
Working with a dedicated Novata Customer Success Manager, August was able to re-create the firm’s annual ESG RFI in the Novata platform, customizing the questions based on priorities for 2023. Novata helped with the heavy lifting of onboarding GPs to complete requests in the platform.
Despite some initial skepticism around adopting a new platform, August noted that feedback from GPs has been overwhelmingly positive. “Once they were able to access the system, they found it to be intuitive,” he said. In-platform descriptors and guidance for each metric also helped alleviate the volume of content-related questions the team received from GPs while responding to requests. Survey completion rates, too, are on the rise — the response rate has risen steadily from 65% in the first year to nearly 70% received and completed on the portal this year.
The platform’s data analytics and benchmarking tools will also be a benefit as the team analyzes 2023 data and engages with GPs, according to August. In particular, the aggregated data helps inform the firm’s view of market analysis that it uses in its sustainability report and provides critical market insights for speaking with limited partners (LPs) and GPs. Additionally, the team uses responses to engage with GPs on priorities and initiatives around key ESG topics and get a quick snapshot of performance to inform the deal team’s decision making.
Moving forward, August expects the foundational work done this year to lead to better results. “Looking to next year, all of the setup work is done. I think we’ll do some tweaks to the questions we’re asking because we do that every year to keep up to date on what LPs are asking for,” he said. “I’m very excited for next year because we’re 95% of the way there. All the process working with the Novata team on setup was really easy.”
* Inclusive of $117.3B in discretionary assets under management and $700.7B in non-discretionary assets under management, as of June 30, 2023
