Organisation: Linzor Capital Partners

Signatory type: Investment manager

HQ country: Chile

AUM: US$736 million



Asset class: Private equity

Geography: Latin America

Sectors: Healthcare, education, technology


Linzor is a Latin American mid-market private equity general partner with assets under management of around US$736 million and a responsible investment policy that closely integrates ESG considerations into each step of the investment process, from fundraising to screening, due diligence, investment, ownership, and exit.

Our most recent fund, LCP III, is invested in companies with significant impact in areas such as financial inclusion, quality education, affordable specialised healthcare, and access to technology.

We share our responsible investment policy and objectives with our limited partners from the fundraising stage, communicating that ESG and impact-related initiatives are considered an important driver in our value creation process. During screening of investments, we exclude companies, sectors and business practices deemed harmful, in which we cannot find a way to meaningfully transform the business within our investment horizon while meeting our target returns.

In the due diligence step, we evaluate the ESG-related risks and opportunities in more detail. To identify gaps and risk factors, our deal teams use an ESG questionnaire that is based on the BII’s ESG Toolkit for Fund Managers and the sector-specific metrics recommended by SASB in its materiality matrix. Deal teams benchmark the target company’s ESG policies and performance against industry peers using publicly available information.

This information is complemented with the drafting of an impact thesis for the investment, a short statement that articulates how the company contributes, through its products, services or activities, towards one or more of the Sustainable Development Goals (SDGs). If the transaction moves forward, the work done during due diligence sets the stage for the ESG and impact-related efforts during our holding period, which are the focus of the rest of this case study.

The ownership stage is where we believe we have developed the most innovative and impactful approach, given our active investment style, focus on control investments, and emerging markets positioning. We have undertaken an annual process for all LCP III portfolio companies to:

  • outline their impact thesis
  • measure and track key impact indicators
  • identify and mitigate risks
  • establish an action plan to pursue agreed-upon ESG and impact objectives, including cross-portfolio climate action and diversity goals.

As part of this process, portfolio companies use the SDG framework to articulate their impact, the SDG Action Manager tool to quantify their alignment with the SDGs and to establish quantitative targets, and a proprietary set of ESG indicators defined by Linzor.

Why this approach?

Our experience investing in Latin America has convinced us of the need for businesses to work harder to meet responsible investment objectives, contributing to the low-carbon transition and promoting inclusive growth. Latin American countries are developing nations, with comparatively lower levels of socioeconomic development and higher corruption risk and inequality than developed markets, which underlines the need for responsible investment.

From our position as a diversified, control investor, we are well situated to implement a robust ESG strategy tailored to the Latin American context, and to assess its impact on the value and resilience of our portfolio. We aim to engage and make a tangible difference within our portfolio companies, while also setting an example for other businesses and investment firms.

Our ESG approach was designed to leverage our existing strengths:

  • An active investment style, working closely with management to set business strategy and support its implementation.
  • A detail-oriented approach that involves introducing systems and processes to track KPIs and using them to enhance board-level decision-making.

This approach has allowed us to drive value creation and mitigate risk more effectively. We apply this methodology in a structured, uniform way across the portfolio to ensure that all ESG-related risks and opportunities are considered.

Focus on ESG and impact-related efforts during the holding period

We formed an ESG and Impact Committee composed of Linzor investment professionals and two external members:

  • Claudia Zeisberger, founder of the Global Private Equity Initiative at INSEAD.
  • Gonzalo Muñoz, High-Level Champion of COP25 and founder of TriCiclos and Manuia, both sustainability consulting companies in Latin America.

The Committee was tasked with overseeing the ESG and impact process at the ownership stage and driving engagement with deal teams and portfolio companies, among other responsibilities.

As a first step, the senior management of each portfolio company took part in workshops facilitated by Manuia. These had the goal of identifying the companies’ positive and negative impacts, developing an impact thesis, and brainstorming ideas to increase their contribution towards the relevant SDGs. In advance of the workshops, each company completed:

  • the SDG Action Manager, an impact management tool developed by B Lab and the UN Global Compact, which produces a quantitative score for the alignment of a company’s policies and practices with each SDG and allowed us to establish a baseline for future comparisons
  • carbon footprint calculations in accordance with the Greenhouse Gas Protocol
  • a set of ESG indicators selected by the Committee from relevant international frameworks.

The ideas generated in these workshops were then developed and refined into detailed action plans.

The Committee has held annual sessions with each company’s management team and the Linzor deal teams to review progress on the action plans, including details on target SDG Action Manager score increases, company-specific impact indicators, carbon overviews that outline current emissions and mitigation strategies, as well as flagship impact projects.

These sessions have produced rich conversations between companies’ senior managers and committee members, who have identified additional areas for improvement, contributed fresh ideas, and challenged management to set more ambitious targets.

The Linzor deal teams monitoring each investment are required to follow up on these action plans continuously throughout the year as part of their board roles and during their interactions with management teams. Management compensation has been linked to ESG objectives in most cases. The Committee shares periodic updates with the Linzor Investment Committee on the overall progress of our ESG and impact programme, and prepares an annual impact and sustainability report to share with Linzor investors and the general public.


All LCP III portfolio companies defined their impact thesis, demonstrating their potential to generate positive impact by scaling their operations further. Examples of impacts achieved include:

  • SIES Salud (Colombian specialised healthcare provider):
    • HIV patient mortality rate of 0.4%, compared with a national average of 1.6%
    • 84% of HIV patients with undetectable viral load, compared with a national average of 80%
    • 73% female representation among all employees and 62% among senior managers
    • 3 of 22 locations powered by solar panels.
  • Mundo (Chilean low-cost internet provider):
    • Coverage of 36% of Chilean households
    • Presence in 132 out of 346 districts
    • 33% of clients in cities with less than 50,000 inhabitants
    • Free services to 1,600+ clients (schools, municipalities)
    • 1,369 jobs created during Linzor’s holding period.
  • UTEL (Regional online university):
    • Total enrolment of 92,000 across more than 20 countries
    • Student Net Promoter Score of 66%
    • 89% alumni employment rate
    • Average alumni wage twice the national average
    • Carbon intensity per student about 30% of a traditional university
    • More than 2,537 jobs created during the period from Linzor’s entry into the company until 31 December 2021.

In addition, all portfolio companies improved their SDG Action Manager scores significantly, including an average increase of 25.5% for SDG #5 Gender Equality and 23.5% for SDG #13 Climate Action. All LCP III companies calculated their carbon footprint for 2021, resulting in a Weighted Average Carbon Intensity of 19 tCO2e per revenue in US$ million.


A key challenge has been collecting data, as some indicators are not easy to measure year after year. In these cases, we seek alternatives that are both feasible and representative. For example, in our education companies, we may conduct post-graduation surveys on a random sample of the alumni base rather than contacting all alumni. A second challenge is that given their size (revenues of US$30 million-$200 million), our companies do not have the budget for dedicated sustainability departments. These initiatives are instead executed by working groups formed by senior management, motivated employees who volunteer to participate, and Linzor deal teams.


Our approach has elevated ESG and impact considerations to a top priority in each company, ensuring board-level and senior management buy-in for the initiatives and close linkage of ESG and impact goals with the business strategy.

The benefits for portfolio companies are numerous: stronger brand vis-à-vis clients and employees, competitive advantage or differentiated offering, cost savings (e.g., electricity, paper), closer relationships with communities, and moving a step ahead of changing regulations. This work has also been a source of motivation and drive for management teams and employees, many of whom place significant value on working at a responsible company.

We seek to instil our focus on ESG and impact into the portfolio companies’ culture and overall strategy, institutionalising key initiatives like carbon footprint monitoring and addressing gender gaps, which we believe increases the chances that those actions will continue past Linzor’s exit.

In one recent example, almost a year after our exit from Mundo, the abovementioned Chilean internet provider, the initiatives implemented as part of its ESG and impact action plan continue to be central to the company’s strategy and are being expanded.

Next steps

We regard our methodology as a work-in-progress that will be fine-tuned over time, incorporating feedback from relevant stakeholders, including our limited partners, portfolio companies, financing providers, organisations such as the PRI, and applicable reporting standards and guidelines. Following our commitment to the Net Zero Asset Managers initiative, we are in the process of establishing SBTi targets for each portfolio company. We are also considering obtaining ESG ratings to ensure accountability and independent verification.