Heterochromatin protein that acts as a transcription repressor and has the ability to promote the formation of large heterochromatic domains. May act by recruiting heterochromatin proteins such as CBX5 (HP1 alpha), HDAC5 and MBD1. Represses IGF2 expression by binding to its CpG-rich P3 promoter and recruiting heterochromatin proteins (By similarity). Interacts with CBX5 (HP1 alpha), HDAC5, MBD1 and SP1. Localizes to heterochromatin and inactive X chromosome. Colocalizes with histone H3 trimethylated at 'Lys-27' (H3K27me3) (By similarity). The BAH domain is required for localization at H3K27me3.