legal

Transparency of sustainability risk policies – article 3(1)

​

General overview

 

A sustainability risk refers to an environmental, social or governance (ESG) event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.

The AIFM reviews and assesses potential sustainability risks within the meaning of SFDR as part of its decision-making process and ongoing risk monitoring with respect to investments made or to be made by the Fund and has integrated such review within its internal procedures and policies, as further detailed hereafter.

 

Relevance of sustainability risks

 

Sustainability risks may affect the Fund’s performance having regard to the types of investments made or to be made in accordance with its investment policy and objectives, meaning that if any such risk occurs, returns on investments may be materially negatively affected as a result. Investors and potential investors should note that it is difficult to assess with reasonable certainty the probability of the occurrence of such risks and the likely impact of such materialized sustainability risks on the value of investments.

 

Assessment process and ESG Policy

 

The identification and assessment of risks, including sustainability risks, will take place on an ongoing basis if and when investments are made in accordance with the Fund’s investment policy and the ESG Policy (as defined below). Such review is performed by the AIFM as summarized below:

​

• Prior to an investment decision being taken on behalf of the Fund, the AIFM identify the material risks, including sustainability risks, associated with the proposed investment;

• These risks form part of the overall investment proposal to be submitted to the Investment Committee (as defined in the limited partnership agreement governing the Fund) by the AIFM;

• Ultimately and following its assessment, the AIFM makes the relevant investment decision having regard to the Fund’s investment policy and objectives and subject to the Investment Committee’s approval.

​

The identification, assessment and, to the extent possible, mitigation of sustainability risks is embedded into the above process through the implementation of the AIFM’s ESG internal policy (the ESG Policy).

​

No consideration of adverse impacts of investment decisions on sustainability factors – article 4(1)(b)

 

Article 4(1) of the SFDR requires fund managers such as the AIFM to provide a clear statement as to whether or not they consider the „principal adverse impacts” of investment decisions on sustainability factors, i.e. environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

 

Although ESG and sustainability risks are important to the AIFM, the latter does not consider the adverse impacts of investment decisions on sustainability factors in the manner prescribed by article 4(1) of the SFDR, in particular due to the fact that (i) no reliable and sufficiently available or accessible data are available to perform such impact measurement and provide the mandatory reporting imposed by the regulatory technical standards in a consistent manner; (ii) the investment strategy and objectives of the Fund and thus its overall portfolio are neither ESG-focused nor, in the opinion of the AIFM, likely to have an impact on sustainability factors and (iii) the underlying investments are not generally required to, and may not currently, report on such factors.

 

Transparency of remuneration policies in relation to the integration of sustainability risks – article 5(1)

 

For the purposes of article 5(1) of SFDR, the AIFM declares that it has not put in place a remuneration policy in light of the fact that it qualifies as a registered alternative investment fund manager and thus does not fall under such requirement under the AIFMD.