Context Signatories should: OR In addition, for listed equity assets, signatories should: disclose their voting policy, including any house policies and the extent to which funds set their own policies state the extent to which they use default recommendations of proxy advisors report the extent to which clients may override a house policy disclose their policy on allowing clients to direct voting in segregated and pooled accounts; and state what approach they have taken to stock lending, recalling lent stock for voting and how they seek to mitigate ‘empty voting’.
For listed equity assets, signatories should: disclose the proportion of shares that were voted in the past year and why provide a link to their voting records, including votes withheld if applicable explain their rationale for some or all voting decisions, particularly where: there was a vote against the board there were votes against shareholder resolutions a vote was withheld the vote was not in line with voting policy.
explain the extent to which voting decisions were executed by another entity, and how they have monitored any voting on their behalf; and explain how they have monitored what shares and voting rights they have.
For fixed income assets, signatories should explain their approach to: seeking amendments to terms and conditions in indentures or contracts seeking access to information provided in trust deeds impairment rights; and reviewing prospectus and transaction documents.
Outcome For listed equity assets, signatories should provide examples of the outcomes of resolutions they have voted on over the past 12 months. | At StepStone, we see actively exercising our rights and responsibilities as an integral aspect of our stewardship. Because our business is exclusively focused on private markets, our stewardship efforts take place when assets are private. We exercise our rights and responsibilities by actively engaging with GPs and assets through various means, including board seats, LPAC seats, AGM participation, and regular meetings. We cover this in more detail in How we engage and Managing climate change risk across our investments. More broadly, during LPAC meetings, which typically take place once or twice a year, we exercise our governance rights. During these meetings, participants deliberate on an array of issues, which may include: Given our indirect investment model, we expect GPs to exercise their full rights and responsibilities concerning the management of underlying assets. This is because a significant part of value creation within these investments depends on the GP and its approach to active engagement. We explain our expectations in more detail in Engaging and setting expectations with GPs. Before investing, we carry out a rigorous GP due diligence and selection process, which includes evaluating their stewardship practices and commitment to active ownership. Outlined here, our RI due diligence process is designed to enable us to assess the capabilities of the GPs in which we choose to invest in and/or alongside. Overall, we expect GPs to fulfill their rights and responsibilities aligned with their underlying fund strategy and geographic focus. For instance, we expect buyout managers to exercise their considerable influence within portfolio companies, while private debt managers may have lower levels of direct influence, but may be able to use tools such as RI margin ratchets. To see how our Private Debt team used margin ratchets in 2024, see this case study. Our RI guidance modules provide GPs with our views and recommendations on how to address priority topics during engagements with portfolio companies. For select co-investments, we may engage directly with assets on material RI risks and opportunities where appropriate. We seek to exercise our rights and responsibilities, which will depend in part on our level of ownership and governance rights. For instance, when our influence is more substantial, such as holding a board seat, we actively exercise our rights and responsibilities by engaging with assets on material topics. We apply this approach across asset classes and geographies, although specific focus areas and approaches may vary depending on the nature of the investment. Listed equity investments As a private markets investor, we have no products dedicated to public equities. While there may be instances where underlying private assets within our Private Equity investments transition to the public market during the holding period, this represents a very small proportion of our overall AUM. Typically, this type of transition happens toward the end of the investment, which is promptly liquidated. Moreover, a significant portion of our public holdings are indirect in nature, whereby we invest as LPs in private equity or VC funds, which, in turn, invest in private assets that may eventually become public. For indirect holdings, we do not control voting decisions. As a result, we’ve disclosed limited information about the public equities we have exposure to under our Private Equity strategy. Our full focus remains on private markets, where we leverage our experience and resources to generate value and deliver sustainable outcomes for our clients. Our Proxy Voting Policy As explored in Managing conflicts of interest, we mainly exercise our rights and responsibilities as private markets investors through LPAC, board, and observer seats. In the infrequent event that we do engage in proxy voting, as a matter of policy and as a fiduciary to our discretionary clients, we vote for what we believe to be in their best economic interest (we generally don’t have the legal authority to vote proxies on behalf of advisory clients). Our policy on proxy voting is part of our Global Compliance Manual and covers our approach to: monitoring corporate actions receiving and voting client proxies disclosing any potential conflicts of interest making proxy voting information available to clients maintaining relevant and required records.
Our proxy voting process In the limited cases where we are able to vote, we vote proxies in a manner that we believe aligns with the best economic interests of the client. As per our guidelines, we generally make voting decisions in support of management unless we believe that this is not in the best interests of the client. We decide non-routine matters on a case-by-case basis, taking into account the opinion of management, the effect on management and shareholder value, and the issuer’s business practices. We may also abstain from voting if we determine it is in the best interests of the client, based on factors including any legal restrictions on trading resulting from exercising the proxy. In consultation with our Chief Compliance Officer, we may also consider any special regulatory implications applicable to the client or StepStone resulting from the exercise of the proxy. Our policy is to vote all proxies from a specific issuer the same way for each client, unless a client informs us of qualifying restrictions. Clients may override this by placing reasonable restrictions on our voting authority for proxies. Activity and outcomes: listed equity investments In common with private equity peers, we do not disclose proxy voting information relating to our limited exposure to public equities under our private equity strategy. This includes: |
