Who doesn’t love a good party? In the corporate world including finance, celebrations certainly play an important role. They reward efforts and facilitate team building and bonding. Company dues are also a way to emphasise a firm’s culture; and usually, that’s a good thing. Unfortunately for Swedish private equity Triton Partners, the culture displayed at their 2022 retreat wasn’t really what they were hoping to project on paper, as it appears in a recent article published in German daily Handelsblatt.
Long story short, in the name of public interest and despite a litany of lawyers’ letters, Handelsblatt displayed a less-than-glorious picture of Triton Partners’ culture based on testimonials of current and former employees as well as video and photo evidence of a party gone too far (think: a game of ‘spin the bottle’, a partner in underwear, kissing dares and… someone biting a female colleague in the neck?!) It all sounds like some people continued to live unconcerned throughout the whole #metoo cultural shift. And it would probably have been easier to dismiss the incident as an isolated case, if it wasn’t for the fact that the partner in underwear was also the founder and CEO, Peder Prahl.
Indeed, Triton Partners had gone to some lengths to show that they care about ‘responsibility’ including gender diversity and inclusion. As the website proudly claims: “We are future orientated”. What they mean by that is illustrated in a series of ‘RI Spotlights’, downloadable pdf publications on a number of sustainability-related themes. The issued dated December 2022 (the same year as the infamous party) is dedicated to ‘Diversity, equity and inclusion in Private Equity’. “Triton’s DEI strategy begins with its own operations, where we celebrate and encourage diversity,” proudly states Cecile Dutheil, Triton Head of Human Capital. “At Triton, we have driven the proportion of female investment and other professionals from under 10% in 2016 to over 25% today,” claim both co-Managing Partners Peder Prahl and Martin Huth in their introductory adress. Later, the report also states: “Our Inclusive Culture Survey, carried out in Summer 2021, provided an opportunity for Triton employees to share perspectives and experience of Triton’s culture relating to inclusion, diversity and belonging. We take the findings of these seriously in designing our strategies for corporate change.” (Note that they didn’t say: “in watching our behaviour.”)
I find it hard to understand the dichotomy between the two expressions of Triton’s culture: the one video-documented alcohol-fuelled and metoo-blind and the other well-polished, liberally esged and nicely-pdfed. Most incongruously, both are completely contemporaneous and top-down driven. In an joint interview of Martin Huth and Claus von Hermann published in Börsen-Zeitung on December 9, in response to the Handelsblatt article, von Hermann admitted (in German): “There is obviously a gap between the target image and the actual perception by employees.”
Huth also said: “Of course, investors have questions, because the events that have been reported are not in line with their own values, which they use in their investment criteria – and not with ours either.”
So, there are ‘values’ (presumably that the company is ‘future-orientated’ and those things written in the pdf), which form part of the ‘target image’ that the employees failed to ‘perceive’? What about behaviour and accountability? Well, that’s all going to be fine, now, apparently. “Peder Prahl is an excellent investor and I continue to believe he is the right leader for our company. He is aware of his misconduct and has apologized,” Huth said. And von Hermann also assured: “We are working on this and want to ensure that something like this does not happen again. We are commissioning an external service provider to do this.” According to the interview, the consultant is running an employee survey. Let’s hope it works better than the one performed in 2021.
Clearly some investors care. It seems there was no knee-jerk reaction, but for a perpetually fund-raising partnership, an incident like this should bear consequences. According to Funds Europe, US-giant CalPERS and Danish Bibukenfonden, among others, have shown concern. Not many large Nordic investors seem to believe in the fond any longer. According to Swedish finance daily Dagens Industi, the private-equity focused state pension fund AP6 has exited its investments in Triton’s past vintages via the secondary market and is not looking to invest in future vintages. As far as we know, this move wasn’t related to the company’s culture, but based a long-term assessment (even more damning if you ask me).
As the wisdom goes, if it walks like a duck, talks like a duck, then… there is a lot of time and money to be wasted in finding excuses. If an investment firm says something and does the exact opposite at the same time, it doesn’t matter whether it is DEI or ESG or financial fraud. It is a lie. What other targets are the employees ‘failing to perceive’? To regain trust, they ought to do a lot more than running an employee survey.
This story should be taken as yet another cautionary tale. Don’t project an image you don’t believe in. We will find out who is swimming naked, eventually, and so will your investors.
