Freeport Financial Partners LLC (“Freeport”) provides investment advisory services to certain funds and separately managed accounts (collectively, the “Funds”). These Funds will primarily invest in floating-rate senior secured loans issued to lower middle market borrowers backed by private equity firms that the Principals have underwritten and believe to be top-tier firms.

Freeport understands that many of the investors in its Funds desire that their capital be invested in a socially responsible manner with due attention paid to environmental, social, and governance (“ESG”) factors.  Freeport wishes to respond to investor inquiries in this respect and set forth its ESG policy.  Freeport strives to manage ESG issues through application of its own internal investment process and with the aid of its external private equity partnerships.

Private Equity Partners

Freeport typically transacts with private-equity firms that have well-established environmental, social and governance investment guidelines.  Given the passive nature of its debt investments, Freeport typically relies on its private-equity firm partners to actively promote ESG characteristics at their companies that are Freeport borrowers.  These private-equity firms are increasingly adopting formal ESG policies, which memorialize the socially responsible investment practices that Freeport has typically observed in connection with their ownership of Freeport borrowers.  These firms typically combine rigorous upfront due diligence with active ongoing ownership to continually evaluate relevant ESG factors, mitigate risks and work on opportunities for improvement.

Investment Process

Freeport, on behalf of each of its Funds, integrates socially responsible practices throughout its investment process.

  • Deal Sourcing: Freeport invests in first lien loans issued primarily to lower middle market borrowers owned by private-equity firms.  Freeport targets companies owned by these private-equity firms that operate in stable industries that are not susceptible to reputational and headline risks.
  • Screening: Upon introduction to an investment opportunity, Freeport confirms that the target company operates in accordance with local laws and is in good standing within its community.  Freeport will not typically invest in companies participating in controversial markets, including, but not limited to, abortifacient drugs, marijuana, gaming/casinos, oil & gas, pornography, stem cell research, tobacco, weapons manufacture, and environmentally challenged endeavors.
  • Due Diligence: Freeport conducts primary due diligence review and analysis to ensure that each targeted company is exhibiting good environmental, social and governance practices.  Primary due diligence can consist of meetings with management and direct review of Freeport-requested diligence materials.  Freeport will also typically engage third parties to aid in the production and analysis of specific diligence items such as i) legal counsel for legal due diligence, including litigation, contractual and corporate governance matters; ii) background firms for background checks on targeted companies and their management; iii) industry experts for market analysis and customer calls; and, as necessary, v) various other consultants for review of such items as regulatory and environmental compliance.
  • Investment Decisions: Freeport’s Investment Committee reviews a detailed internally drafted report of recommendation with respect to each of its potential investments.  That report incorporates, among many other things, any relevant diligence related to the ESG factors discussed above.  The Investment Committee must achieve unanimous agreement among its members to proceed with an investment.
  • Monitoring: Freeport does not typically hold a board seat at or an ownership interest in the companies to which it issues debt.  Freeport does, however, typically meet with the management teams of its borrowers several times a year in person or virtually.  During these meetings, Freeport can review and discuss many things, including performance with respect to a borrower’s environmental, social and governance practices.  In this manner, Freeport can continue its ESG diligence over the life of each its investments.


The Freeport Management Committee conducts ad hoc reviews of our ESG policy and remains responsible for its implementation.  This policy may be supplemented or revised based on these reviews.