Statement in relation to the Transparency of Sustainability Risk Policies and Adverse Sustainability Impacts pursuant to Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on Sustainability-Related Disclosures in the Financial Services Sector (“SFDR”).
Integration of sustainability risks
AIFCAP Managers Ltd (the “AIFM”), qualifies as a “financial market participant” under SFDR. Therefore, the AIFM has decided to publish on its website information about its policies on the integration of sustainability risks in its investment decisions-making process.
As of today, the AIFM does not consider specific ESG principles at the entity level nor does any of the AIFM’s funds under management have sustainable investment as part of its investment objectives or policies for the purposes of Article 9 of the SFDR. Nevertheless, the AIFM considers ESG matters to be of high importance and intends to gradually integrate considerations and their implications within the investment assessment, decision making process and risk exposure of each fund under management, unless otherwise stated in the relevant fund documentation. Accordingly, the AIFM will implement processes on reviewing and re-assessing the risk profiles of its funds so as to integrate the potential impact of sustainability risks directly or indirectly through other, already-identified investment risks such as market risks, operational risks, liquidity risks, credit risk/counterparty risks, funding risks or reputational risks.
Transparency of adverse sustainability impacts at entity (AIFM) level
The AIFM acknowledges that certain of the investments that may be made by it on behalf of the funds it manages, may be negatively impacted by sustainability risks and that sustainability risks may impair the value of the investments made by the AIFM. However, the AIFM does not currently consider the adverse impacts of its investment decisions on sustainability factors, within the meaning of Article 4(1)(a) of the SFDR, as (i) the AIFM considers that for the time being, it does not have sufficient guidance or available data of satisfactory quality to do so and (ii) in view of the fact that the SFDR regulatory technical standards are not yet in final form.
The AIFM might reconsider its position in the future, subject to the availability of such guidance and data so as to take into account the adverse impacts on its investment decisions on sustainability factors.
Transparency of the AIFM’s remuneration policy in relation to the integration of the sustainability risks
It is the AIFM’s policy to maintain remuneration arrangements that, among other things, do not encourage risk-taking (including in respect of exposure to sustainability risks as defined in the SFDR) that is inconsistent with the risk profile of the AIFM.
Transparency in pre-contractual disclosures
Where required by SFDR, all funds under management shall include relevant descriptions in its pre‐contractual disclosures i.e. Private Offering Memorandums, prospectuses or art. 23 AIFMD disclosures, on how sustainability risks are integrated into investment decisions; as well as the results of the assessment of the likely impacts of sustainability risks on the financial returns of the funds. Where sustainability risks are not to be deemed relevant, a clear and concise explanation of the reasons therefor shall be included. Further, where required, all funds under management shall include in their pre‐contractual disclosures a statement on how Principal Adverse Impacts (PAI) are considered or a statement that PAIs are not considered and the reasons therefor.