Profile: Mark Pleaner, Lightrock

by Matthias Plötz 11 May 2023

The Drawdown (TDD): You’ve moved from law to compliance, from investment banking to impact. Can you take us through that journey and how you found yourself in the impact space?

Mark Pleaner (MP): Originally from South Africa, I studied and qualified as a lawyer there. Once I moved to the UK, I started working for the FSA, the predecessor to the FCA, where I really got to grips with investigating and preventing both anti-money laundering and insider trading – two areas that I remain professionally interested in.

After the FSA, I joined Investec in my first compliance role. From there, I was headhunted into Goldman, working in the central compliance team. It was an incredibly enriching time, there was always a person who was cleverer than you – it was a constant learning experience.

One day I got a call, out of the blue, from a recruiter who asked whether I would like to work as head of compliance at an impact firm. I had no idea what ‘impact’ meant, it was still in its infancy at that point.

But I met the Lightrock team. They were an incredible bunch of people – equally fun and determined – and with the firm’s activity in, among others, Africa, I had the opportunity to give back to the community close to my heart and make a real difference there. For all these reasons and more, I’ve been at Lightrock since.

TDD: You joined the firm shortly after it became an independent organisation – can you take us through some of your initial projects and priorities?

MP: I am the first dedicated compliance officer and MLRO at Lightrock. My predecessor was the LGT compliance officer, who provided compliance services to Lightrock, which meant the firm had a compliance infrastructure when I joined, it just was not exactly what I envisioned it to be.

Consequently, the first priority was taking stock. Who are we, our clients, our regulators? What do these parties do? Once I was on top of everyone’s role in our cosmos, the next question was what we need to have in place by priority. Looking at what is deliverable, to what extent, in what timeframe and what do we need to have in place yesterday?

Now I had a new framework that needed to be implemented. When I started, a lot of the processes were manual and on spreadsheets. Which are great if they are kept up to date but that’s not always the case. So, I wanted to design streamlined processes that would make mine and my colleagues’ lives easier.

There is nothing worse than a colleague receiving a questionnaire via email, then a week later they get another email asking them to declare all their holdings, followed by another email the following week asking whether they are fit and proper. My aim is to enable my colleagues to be efficient at work and not tie them up with tasks.

Keeping Lightrock compliant relies on influencing the aggregate behaviours of every employee and enabling colleagues to do their work without fear of sanctions or impediment. I believe a big part of this is making their lives easier. We installed a compliance system that simplifies, aggregates and flags employee obligations and training requirements so they can be more easily addressed.

However, we make sure to complement this system with a human component. Myself and members of my team dedicate time each week to supporting colleagues. We troubleshoot issues, answer any questions and identify training requirements by closely monitoring training performance and test scores.

TDD: Lightrock has a compliance team and a legal team, which are independent from one another. How do you coordinate, collaborate and remain aligned?

MP: Our GC and I collaborate and work closely on investments, structuring and fund-related compliance but we are not part of the same team. As a compliance officer, I am responsible for ensuring the firm’s alignment with regulatory standards. To a degree, these are reflected in our contracts, negotiations and investments but the latter are primarily our lawyers’ domain.

This division of responsibility is important to me – we are both responsible for our respective sides of the business. But we will collaborate extensively and disagree on certain issues, which is healthy. Lightrock is an impact investor, and a fundamental appeal for everyone who joins the firm is to make that positive impact. As suchs every employee is working towards the same goal and has a part to play for Lightrock to reach that goal. Any disagreement between teams to reach this goal is healthy – we all like to be challenged.

Moreover, challenging each other’s positions and drawing upon our varying experience allows us to test our theories, beliefs and approaches; enabling us to determine the best possible approach to any situation while also providing room for continuous personal development.

TDD: Lightrock is active in Europe, India, Latin America and Africa – how do you stay on top of the varying jurisdictions and compliance requirements?

MP: I have compliance oversight over all the regions, however as Lightrock entities in the UK, India and Brazil are regulated, we need a compliance officer on the ground in each of them. This is not only a regulatory requirement but is also to ensure accountability. These compliance officers do not spend 100% of their time on compliance, and this means I need to have extra oversight. I have regular catchups with the compliance officers and visit the offices when possible.

We have tried to create a harmonised compliance system and liaise regularly to understand what issues may have arisen and where we can foster collaboration, for example on KYC and AML.

There are slight regional differences and we work closely as a team to complete every process as required. It is important to me that despite the team being spread across the globe, they feel they can always be completely frank with me and share any queries, concerns or problems that might arise through the course of their work.

From a pure business perspective, I also need to ensure I stay on top of the various regulatory topics, pipelines, any potential gaps in our programme and how we can all support each other. I am also the director of the African and Indian funds, which allows me to provide oversight over these funds and be aware of what is happening in these jurisdictions.

TDD: How do you see the role of the compliance officer evolving in private equity?

MP: Traditionally, compliance sat with legal but, in my view, it needs to be separate and sit outside of the legal function. As regulations become stricter, I see that becoming the norm because the essence of compliance is accountability. But the list of topics for which accountability needs to be taken is only getting longer and more complicated.

Legal already have a lot on their plate and with increasing regulation, general compliance officers will not suffice anymore either. I see the function becoming increasingly specialised, with separate experts on ESG, AML, decarbonisation and so on.

Because it establishes standards of behaviour, compliance is an integral building block of a firm’s culture, which makes it too fundamental to be simply a sub-division of a department, while the remit it covers is only becoming increasingly entrenched, requiring dedicated professionals for all of its arms.

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Pleaner shares his take on compliance being a ‘cost centre’: “The way I see it, we bring a different type of value. If I am doing my job, you won’t necessarily notice, but you will feel it quickly if I am not. What I mean by that is, without compliance and the controls implemented there is a high risk that the firm will breach several regulations and be sanctioned by the authorities. An effective compliance team ensures that our investment professionals can go about their day and smoothly close deals without the risk of breaching regulations – because my team has done the work in the background to facilitate this.”

He explains how the firm values this: “Alongside the investment team, I attend all dealflow meetings, board meetings, management committees and provide my input from the sourcing onwards. This ensures that compliance is part of the due diligence process and reassures our investment professionals in their decisions.”

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