1. Summary

Silver Lake Technology Management, L.L.C. (“Silver Lake” or the “Firm”) has been investing with purpose and delivering value to investors – and by extension portfolio companies and employees – since its founding in 1999. The Firm takes a proactive approach to evaluating and managing material risks and identifying value creation opportunities, including those related to sustainability factors and resilient business practices (as further described below), that can materially impact the performance and long-term success of the Firm and portfolio companies. Silver Lake believes that this approach is consistent with Silver Lake’s investment philosophy and fiduciary duty.

2. Background

Silver Lake’s approach is tailored to each particular investment strategy and individual company. Silver Lake’s portfolio includes companies that range in terms of size, geography, industry, sector and maturity with regard to incorporating resilient business practices which requires flexibility and adaptability.

The Silver Lake Partners (“SLP”) and Silver Lake Alpine (“SLA”) strategies principally target larger investments in later stage companies, and Silver Lake frequently has varying degrees of governance rights and varying degrees of ability to influence a company’s trajectory. In contrast, Silver Lake Long Term Capital (“LTC”) principally targets companies or funds, which often include smaller, more passive investments than SLP or SLA, and therefore Silver Lake is likely to have a more limited ability to influence the company or fund.[1] 

Material risks and value creation opportunities are considered as part of the diligence process to evaluate new investments and inform related policies and procedures. For purposes of this policy, these factors and practices include considerations that Silver Lake believes may meaningfully affect a portfolio company’s value and performance or otherwise subject the company to substantial risk.

We have developed a framework to guide our approach to diligence, monitoring and engagement with portfolio companies in these areas. Priorities include:

• Human Capital: Employee engagement, talent, human rights, health and safety
• Environmental Management: Physical and transition risks, resiliency, energy management
• Data Privacy, Security, & Ethics: Data privacy, cybersecurity, incident response
• Corporate Governance: Business ethics, board composition, oversight and accountability

As part of ongoing monitoring, we periodically seek information on policies, practices, disclosures and compliance with applicable laws and regulations (e.g., labor and anti-corruption laws and information security regulations), to the extent information is available and believed to be material. However, implementation and oversight of these matters remains the obligation of each individual portfolio company.

The strategic and systematic consideration of material considerations is an important part of Silver Lake’s investment management approach, both as part of the ongoing management of investments and when preparing for exit, where appropriate and feasible. As part of creating, enhancing and preserving the long-term value of the investments made by our Funds, Silver Lake is committed to monitoring lawful and responsible behavior by its portfolio companies, aligning with our goal of maximizing risk-adjusted investment returns for investors.

As part of evaluating the materiality of sustainability, factors and resilient business practices, we consider among other things the Sustainability Accounting Standards Board framework and standards. The Firm also considers relevant portions of other standards, frameworks, guidelines and guidance as relevant and applicable. Our approach has evolved over time and is expected to continue to do so. Starting in 2024, Silver Lake joined the ESG Data Convergence Initiative (“EDCI”) to facilitate streamlined and effective collection and reporting of data.

3. Purpose

The purpose of this policy is to define Silver Lake’s approach to integrating the consideration of sustainability and resilient business practice risks and associated value creation opportunities with respect to potential and current investments. Silver Lake is a member of the American Investment Council (“AIC”), which developed the Guidelines for Responsible Investment (“Guidelines”).[2] These Guidelines incorporate the UN Global Compact’s principles and have been used to inform Silver Lake’s approach.

Silver Lake is committed to evaluating material sustainability factors and resilient business practices (both opportunities and risks) during the initial investment process, and throughout the investment management and exit processes to the extent reasonably practicable under the circumstances, and subject to the provisions of the Confidential Private Placement Memorandums, Limited Partnership Agreements and other legally binding documents associated with the Funds and otherwise consistent with Silver Lake’s fiduciary duties.

4. Scope

This policy is intended to apply to the investments considered or made across all strategies, although Silver Lake’s ability to influence the Funds’ investments and integrate the consideration of sustainability and resilient business priorities will vary across each investment.

As such, the approach for the SLP and SLA strategies is more extensive than for LTC.  Certain of the practices described below are expected to be modified based on limitations regarding, among other things, a portfolio company’s infrastructure and ability to provide, or practices relating to providing, information and track relevant data. For example, LTC is not expected at this time to conduct portfolio company surveys on an annual basis.

It may not always be feasible for Silver Lake to engage directly with portfolio companies on material issues or influence their behavior, especially where a Fund has a small relative ownership interest in the company.[3] Where Silver Lake does not expect to be in a position to influence material sustainability factors and resilient business practices, this is taken into account in the investment decision and the Firm will nonetheless consider whether there are other appropriate reasonable efforts for Silver Lake to take in furtherance of the goals of this policy.

5. Investment Process Integration

Silver Lake seeks to integrate the consideration and thoughtful management of sustainability factors and resilient business practices throughout the investment cycle of each portfolio company, subject to the limitations outlined in sections two (2), three (3) and four (4) above.

Initial Investment Process: During the initial investment process, Silver Lake professionals, as well as third-party advisors that the Firm may engage, such as outside counsel and/or third-party expert consultants, perform legal, industry and company-specific due diligence[4] that aims to identify potential material risks and opportunities, including relating to sustainability factors and resilient business practices. Due diligence may include, among other items, evaluation of important and complex business, operational, financial, tax, accounting, corporate governance, environmental, social and legal issues.[5] Silver Lake may seek to collect relevant information from a potential portfolio company via questionnaires, publicly available information, engagement with company management teams, or other means. Material findings relevant to the considerations for transactions are to be documented and shared with the Investment Committee, where appropriate.

During Investment: Silver Lake works to monitor each portfolio company’s focus on relevant and material business considerations. Where an issue is considered by the Firm to require action (including an issue identified during the initial investment process), the relevant investment professionals, in consultation with others, are tasked with determining the appropriate course of action. Using data collected through the annual survey process, these considerations are incorporated into the Portfolio Company Review process, a biennial meeting where investment team and operating team professionals review the SLA and SLP investments, including reporting on relevant material sustainability factors and resilient business practices.

At Exit: Silver Lake will determine the manner in which it addresses any sustainability-aligned or resiliency-focused- efforts during the exit process of any portfolio company on a case-by-case basis.

6. Portfolio Monitoring

Silver Lake undertakes certain documentation efforts as part of this Policy:

Ongoing Portfolio Monitoring:[6] Silver Lake will conduct an annual survey of the portfolio companies in the SLP and SLA Funds. Companies may be excluded from the survey depending on, among other things, the size of the stake. The survey has historically incorporated metrics identified by the EDCI and select metrics from other frameworks, standards and regulations, including the Task Force on Climate-related Financial Disclosures and the EU’s Sustainable Finance Disclosure Regulation. The survey is reviewed each year. Aggregate data is used to help identify trends or opportunities for improvement across companies and inform engagement plans. Company-level findings are shared with deal teams as appropriate, including issues or risks believed to be in need of action. Portfolio company assessments take into account survey responses, observed progress and insights from third-party data sources.

Ad Hoc: In the event a material sustainability or resilient business practice issue is identified at a portfolio company, either through third-party sources or engagement with the company, Silver Lake will review and consider the appropriate course of action including, where appropriate, in partnership with the company’s management team (depending on, among other things, Silver Lake’s level of influence)

Silver Lake values transparency with its investors. Where relevant and practicable, the Firm will consider what, if any, disclosure may be appropriate or permissible, either verbally or in writing.

7. Portfolio Engagement

The Silver Lake portfolio represents a diverse group of companies, each in a unique stage of maturation. Where feasible, the Firm’s goal as a partner is to assist portfolio companies in promoting robust governance and helping them to advance sustainability and resilient business practices and performance in areas that are considered material. Where Silver Lake employees serve on the Board of Directors of a portfolio company, they will to the extent practicable and consistent with their fiduciary duties seek to promote progress regarding material sustainability factors and resilient business practices.

In addition, for SLP and SLA Fund portfolio companies, the Silver Lake team has historically hosted periodic sessions on topics of shared interest so that portfolio company personnel can learn from each other and from outside advisors that bring additional expertise. The Firm also maintains an ongoing dialog with individual companies on sustainability and resilient business practices and has shared research and observations with companies that are earlier in their maturation.

8. Management and Accountability

The Firm has a Resilience & Stewardship Committee (the “Committee”), which is chaired by the Chief Compliance Officer and Head of Litigation and is comprised of senior members of the Firm across relevant functional areas. The Managing Partners are ultimately accountable for oversight of this policy with support from the Committee and other leaders across the Firm. It is the responsibility of Silver Lake’s Head of Stewardship & Impact, who reports directly to the Managing Partners, to ensure that the policy is properly and reasonably applied and that training occurs periodically, covering this policy and a range of related topics and issues. This has historically included a new hire training for Analysts and Associates as they join the Firm as well as an annual governance session designed for Board members and other investment professionals to stay current on selected sustainability considerations and resilient business topics. Additional updates are shared with the Committee and Silver Lake professionals on an ongoing basis.

Silver Lake professionals are responsible for following this policy and identification of material sustainability factors and resilient business practices considerations during due diligence and throughout the investment cycle for each portfolio company. Through the Firm’s Portfolio Company Review process, investment and operating professionals are to report on material sustainability factors and resilient business practices identified in the SLP and SLA portfolios during or subsequent to the investment process. The Head of Stewardship & Impact manages oversight of the monitoring process. The Fundraising and Investor Relations team helps to coordinate the reporting of relevant information to investors and other relevant third parties. The Legal team manages the Funds’ legal risks.

Recognizing the importance of sustainability factors and resilient business practices to many of Silver Lake’s Limited Partners as part of risk assessment and value creation, the Firm seeks to share relevant updates during Limited Partner Advisory Committee meetings, the Annual General Meeting, investor communications, or other forums, when practical and appropriate. Silver Lake publishes an annual report summarizing programmatic progress, changes and updates with regard to our integration of these efforts and initiatives. Relevant members of the Silver Lake team are available to discuss further upon request.

This policy will be reviewed and revised as needed to reflect changes in Silver Lake’s business, law and the context in which the Firm operates.

9. Firm Alignment

Silver Lake is committed to conducting itself in accordance with this policy. Silver Lake holds its employees to the highest of standards and demands that they act ethically, professionally and responsibly. Silver Lake views compliance with this policy as part of each employee’s responsibility to abide and uphold the Firm’s commitment. This policy will be furnished or made available to all Silver Lake employees.

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[1] Under the current sub-advisory agreement with Silver Lake Waterman (“SLW”), the SLW team will execute on its own separate policies and procedures.

[2] American Investment Council, Guidelines for Responsible Investment, published 2009, https://www.investmentcouncil.org/guidelines- for-responsible-investing/

[3] For example, in cases where a Silver Lake Fund(s) holds a minority investment in the publicly traded securities of a company, Silver Lake may have limited control or influence over any risks or opportunities that may affect such company.

[4] Due diligence will vary based on, among other things: (i) the nature of Silver Lake’s investment, (ii) the transaction process and timeline, (iii) the level of access to information, specifically as it pertains to sustainability factors and responsible business practices, and (iv) the target investment’s sector or business model.

[5] Silver Lake LTC is expected to conduct more limited due diligence given the size of the strategies’ investments and focus on investments in earlier-stage private companies and/or funds.

[6] Assumes access to requisite information.