Responsible Investment Policy

Introduction

Beach Point Capital Management LP (“Beach Point” or the “Firm”) believes that integrating financially material environmental, social and governance (“ESG”) considerations into its investment process (“Responsible Investment”) can contribute to long-term investment returns, particularly from a risk-mitigation perspective, and help the Firm better partner with clients that have specific Responsible Investment requirements and/or priorities. This Responsible Investment Policy (this “RI Policy”) is informed by, and subject to, Beach Point’s fiduciary duty to seek to maximize returns on investments for fund investors and separate account clients.

Integration Approach

This RI Policy is intended to provide a broad framework for the Firm’s approach to Responsible Investment. Portfolio managers, in conjunction with the Firm’s Responsible Investment Team (the “RI Team”), oversee the Responsible Investment process. The specific approach to Responsible Investment employed by each portfolio manager will depend on multiple factors, including, among others, the objectives of the strategy, the asset class, the investment time horizon, the portfolio manager’s research and portfolio construction philosophy and process, and financially material ESG considerations, which will vary across the Firm. For the purposes of this RI Policy, Beach Point will determine, at its sole discretion, whether an ESG consideration is “financially material” to an investment.

Beach Point’s approach to Responsible Investment can also be customized for an investment vehicle to allow a portfolio manager to take into account the specific investment goals and values of a client

Integration Process

Materiality Assessment and Due Dilligence

Beach Point’s investment team, in conjunction with the RI team, seeks to identify financially material ESG considerations as part of the investment process. To aid both the investment and the RI teams in identifying financially material ESG considerations for a given investment, Beach Point may utilize globally recognized sustainability frameworks, data providers, and other third-party resources.

Exclusions

Beach Point does not apply universal Responsible Investment-related exclusion lists at the Firm level. However, on a case-by-case basis, the Firm can work with clients to address client-specific exclusion lists or related restrictions.

Stewardship and Engagement

Beach Point seeks to monitor financially material ESG considerations throughout the investment lifecycle and may engage with issuers on financially material ESG considerations or other matters, where appropriate and practicable. This engagement is often focused on increasing transparency and disclosure. Beach Point may take a collaborative approach to engagement by working with other investors and stakeholders to better articulate its position. Beach Point’s Engagement Policy, as well as its Proxy Voting Policy and Guidelines, provide additional information regarding the Firm’s stewardship and engagement activities.

Transparency and Reporting

Beach Point may provide clients with reporting with respect to its Responsible Investment program, where applicable and upon request.

Governance & Oversight

Responsible Investment Committee

Beach Point’s Responsible Investment Committee (the “RI Committee”) has oversight responsibility for the Firm’s approach to Responsible Investment. The RI Committee includes executive-level staff from across the Firm.

 

The RI Committee’s broader responsibilities include:

• Guiding the Firm’s Responsible Investment strategy and approach;
• Reviewing and amending this RI Policy annually, or ad-hoc as needed;
• Evaluating and determining whether additional resources may be required for more effective implementation of the Responsible Investment program;
• Reviewing Responsible Investment-related priorities; and
• Facilitating the sharing of research, analysis and insights on Responsible Investment issues and trends.

Fiduciary Duties and Limitations

As detailed in this RI Policy, Beach Point is committed to Responsible Investment, where appropriate and consistent with its fiduciary duties. Beach Point remains subject to the provisions of the constituent documents (e.g., partnership agreement, investment management agreement, private placement memorandum, and articles of association) of the funds and accounts it manages, and to its fiduciary duty to seek to maximize returns on investments for fund investors and separate account clients.

In addition, due to the nature of the investments typically held in client portfolios, Beach Point generally has limited ability, if any, to review, analyze, influence and/or control the integration of financially material ESG considerations by an issuer. Furthermore, Beach Point may have limited ability to conduct extensive responsible investment-related due diligence in connection with investments.