Private equity firm that prides itself on ‘ethical investing’ buys owner of Pornhub porn site
A private equity firm that prides itself on “ethical investing” has bought the owner of pornography website Pornhub.
Ethical Capital Partners (ECP) bought Mindgeek, the Luxembourg owner of Pornhub and a number of other adult websites, for an undisclosed sum after the group became mired in controversy.
MindGeek, one of the world’s largest porn companies, is being sued over allegations that sexually explicit videos involving children were found on its websites.
The company’s senior management left last year amid a series of criticisms and it was partially cut off from the Visa and Mastercard payment networks in 2020, which nearly led to its collapse. The firm, however, denies any wrongdoing.
ECP’s purchase of Pornhub may have come as a surprise to many, given that, on its website, the private equity group states that it seeks investments in areas that require “grounded ethical leadership”. on principles”.
Fast Fact: Ethical Capital Partners bought Mindgeek, the owner of Pornhub and a number of other adult websites, for an undisclosed sum
Although it said it values ”transparency and accountability,” ECP declined to disclose which of MindGeek’s remaining executives will go on to lead the company.
Solomon Friedman, a lawyer and co-founder of ECP, told the Financial Times that the company would not identify executives because of the “unfortunate stigma” attached to the adult entertainment industry.
He added that in his opinion, much of MindGeek’s criticism and resulting lawsuits were due to misunderstandings about how the company protected content – a problem exacerbated by the secrecy of its former owners, who included Austrian businessman Bernd Bergmair, a former Goldman Sachs employee.
The takeover of MindGeek by ECP is likely to fuel skepticism around investment funds qualifying as compliant with environmental, social and governance (ESG) criteria. ESG is a set of standards used to measure a company’s impact on society and the environment as well as its transparency and accountability.
But the framework has come under fire in recent years as some companies have been caught bragging about being ESG compliant while investing in unethical industries.
ESG compliance has been particularly controversial in areas related to climate change. A report from last October by data platform ESG Book highlighted 95 climate funds invested in fossil fuel companies, including Shell and US giant ExxonMobil.
Analysis by online wealth manager SCM Direct showed that the SPDR US High Yield Corporate ESG fund, managed by US investment firm State Street, held investments in gambling, tobacco and gambling companies. adult entertainment – although he said he was aiming to exclude companies based on their “involvement in certain controversial business activities”.
The £6.8bn Royal London UK Core Equity Tilt fund claimed to integrate ‘responsible investing and environmental, social and governance insights’ into its strategy, while top holdings included Shell, BP and British American Tobacco .
