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Sustainability

Vault AM integrates sustainability considerations into its investment management activities and complies with the applicable disclosure requirements under the Sustainable Finance Disclosure Regulation (SFDR).

AIFM Sustainability Disclosures

Vault AM Sàrl (“Vault AM” or the “AIFM”), as a financial market participant, directly or through delegated activities, integrates sustainability risks into consideration in its investment decision-making process and in its investment advice, when applicable, in accordance with the provisions set out in Regulation (EU) N°2019/2088 of the European Parliament and of the Council of 27 November 2019 (as amended) on sustainability-related disclosures in the financial sector (“SFDR”).

Under SFDR, “sustainability risk” is defined as an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the relevant investment, whereas “principal adverse impact of investment decisions on sustainability factors” (PAI) are impacts of investment decisions that result in negative effects on sustainability factors (i.e. environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters).

Funds under Vault AM management are expected to integrate ESG considerations, as far as feasible, meaning that, where relevant: a) PMs and Investment Advisers shall consider ESG opportunities, material sustainability risks and principal adverse ESG impacts (PAI) in their selection/sourcing processes, while sourcing investments, and as part of their on-going review of the portfolio of assets, b) Risk Management officer/team shall manage exposure to identified major sustainability risks defined and identified for the relevant funds, and c) PMs and Investment Advisers are encouraged to collect ESG reporting from portfolio companies and to produce ESG reporting on the fund assets.

During the pre-investment stage, the Portfolio Manager (PM) and/or Investment Adviser conduct comprehensive due diligence on potential investments. ESG due diligence is integrated where relevant to identify material sustainability risks and major adverse impacts. This process involves engaging with the target company’s management, appointing experts (including environmental specialists), and assessing ESG risks and opportunities. All findings are documented in a pre-investment memorandum, reviewed by Vault AM and the PM officer, and then submitted to the investment committee for approval.

Post-investment, if material sustainability risks were identified during due diligence, Vault AM, the PM, and/or the Investment Adviser will monitor the investment’s progress. This includes tracking risk development and mitigation efforts, engaging senior management for corrective actions, and supporting the implementation of remedial measures.

In compliance with SFDR, all Vault AM-managed funds must include in their pre-contractual disclosures (PPM, LPA, or AIFMD Article 23 documents) details on how sustainability risks are integrated into investment decisions and their potential impact on financial returns. If sustainability risks are considered irrelevant, a clear explanation must be provided.

As at the date hereof, the AIFM does not consider and disclose any adverse sustainability impacts in accordance with point (a) of Article 4(1) of SFDR on a “Financial Market Participant” basis. This applies both to the investment decision-making process and investment advice, when applicable.

The reason adverse sustainability impacts are not considered at present is in light of the increased financial and personnel resources this would require – in particular to do so in line with the specific prescriptive requirements under SFDR – and prioritization of compliance with mandatory aspects of new sustainability regulations in Europe and other jurisdictions in which we operate. In addition, Vault AM is below the thresholds set out by SFDR for mandatory consideration of adverse impacts of investment decisions on sustainability factors. The ability to consider adverse sustainability impacts will be re-assessed in three years’ time.

However, at financial product level, Vault AM, as portfolio manager, and specific products (SFDR Article 9) offered by Vault AM, track and report a number of principal adverse impact (“PAI”) metrics for many of their funds. PAI reporting and statements for certain funds managed by the AIFM may be produced and made available to investors where relevant.

The remuneration policy adopted by Vault AM integrates sustainability-related aspects. In particular, it is designed to ensure that remuneration practices are consistent with and promote effective risk management; and to ensure that remuneration practices do not encourage excessive risk taking with respect to each product and provision of investment advice, when applicable.

As part of this, due account of present and future long-term sustainability-related risk factors are considered when making remuneration decisions.

This remuneration policy will be made available, upon request.

Fund Sustainability Disclosures

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