Article 9 Fund Disclosures
1. General
Pursuant to the provisions of the EU’s Sustainable Finance Disclosure Regulation (2019/2088) (“SFDR”), we are required to provide our potential investors with the mandatory product-level website disclosures (“Disclosures”). As an alternative investment fund, we shall pursue a sustainable development objective and therefore believe that we fall within the scope of article 9 SFDR.
By making the following Disclosures, we aim to increase the transparency on our sustainability approach by ensuring that our potential investors are provided with information regarding (i) the integration of sustainability risks into our investment decision-making process (cf. article 3 SFDR), (ii) the consideration of the adverse impacts of our investment decisions on certain Sustainability Factors (cf. article 4 SFDR), (iii) the integration of sustainability risks into our remuneration policy (cf. article 5 SFDR), and (iv) our sustainable investment objective (cf. article 9, 10 and 11 SFDR).
The Disclosures reflect the information available to us at the time of the Disclosures, as well as our compliance with the current SFDR requirements on the other hand. As our approach to sustainability on the one hand, and SFDR insights on the other hand may evolve over time, it is important to note that the Disclosures may be subject to updates. Nevertheless, we are committed to providing up-to-date information on our sustainability practices and keeping our potential investors informed of any changes that may impact our sustainability approach and the respective Disclosures.
For the purpose of these Disclosures, the following terms shall have the meaning as set forth below:
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“Sustainability Factors” mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
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“Sustainability Risk” means an environmental, social or governance event or condition which, if it occurs, could cause an actual or potential material negative impact on the value of an investment.
2. Integration of Sustainability Risks
As Sustainability Risks could potentially cause a (sudden) material negative impact on the value of our investments, we consider and integrate an assessment of such Sustainability Risks in our discretionary investment decision-making process. A potential Sustainability Risk shall form part of our overall risk management processes and is one of many risks which we shall review, assess and which may, depending on the specific investment opportunity, be relevant to our determination of overall risk.
We aim to single out Sustainability Risks that, should they materialize, could cause an actual or potential material negative impact on the value of our investments by/or combining the following actions:
A. Deal screening:
Prior to making any investment decision, we perform rigorous screenings against environmental, social, and governmental (“ESG”) criteria. More specifically, we shall exclude any investment in portfolio companies that are either engaged in unethical behaviour (such as, but not limited to, the violation of human rights, issues with respect to labour rights, severe environmental damage, and gross corruption) or active in certain industries that could have a negative impact on our environment or society (such as, but not limited to, tobacco, firearms, weapons and ammunition of any kind, alcoholic beverages, …). By employing this approach, we can align our investments with our values and principles, while also minimizing the potential impact of Sustainability Risks.
B. Continued monitoring during the lifespan of the investment:
Throughout the lifespan of our investments, we continue to monitor the portfolio company’s compliance with applicable ESG legislation to ensure that such investments align with our values and sustainability approach. When it comes to long-term investments, we recognize the significant influence we hold over the activities and ESG practices of our portfolio companies. As a responsible investor, we take our responsibility seriously and strive to leverage our influence to implement positive changes throughout the lifespan of our investments. In doing so, our goal is to align the interests of the portfolio companies with those of the broader society and planet.
It is however important to note that not all Sustainability Risks shall prevent us from making a specific investment. If an identified Sustainability Risks are well counterbalanced by other factors, such as potential financial returns or positive social or environmental impacts, the investment may still be deemed appropriate. Ultimately, the decision to invest or not shall depend on a careful evaluation of a wide variety of factors and a consideration of our priorities and objectives.
3. Consideration of adverse sustainability impacts
To this date, we do not report on or consider the principal adverse impacts of our discretionary investment decision-making process on Sustainability Factors (“Adverse Impacts”) (as we are a small organisation, currently lack the resources, and we are limited by our capacity and capabilities to fully consider and conduct a thorough analysis of such Adverse Impacts. Our investment strategy involves investing in small- to medium scale portfolio companies that may not be able to provide the information necessary to accurately determine the Adverse Impacts.)
4. Integration of Sustainability Risks in remuneration policy
As a sub-threshold manager of alternative investment funds, we do not have an obligation to have a formal remuneration policy (cf. article 40 and following of the Belgian Law of 19 April 2014 on alternative entities for collective investments and their managers). Consequently, we do not integrate Sustainability Risks in our remuneration policy.
5. Sustainable investment objective
As set forth above, we will pursue a sustainable investment objective. In accordance with the provisions of the SFDR, sustainable investments can be described as investments in economic activities that contribute to environmental or social objectives, provided that such investments do not significantly harm any other environmental or social objectives and that the targeted portfolio companies follow good governance practices.
We have identified and will actively contribute to the following sustainable investment objectives (“SIO”):
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Quality education
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Reducing inequalities.
A. No significant harm
To comply with the “Do No Significant Harm” principle, we are committed to collaboratively work with our portfolio companies to develop and implement feasible strategies that ensure their businesses do not cause significant harm to other environmental or social objectives. Such strategies may include measures to support initiatives that enhance digital literacy among students and educators.
B. Our sustainable investment objective
Our investment objective is to make sustainable impact investments in accordance with our established SIO. This way, we will seek to invest in portfolio companies that not only generate financial returns but also create the environment for a positive, measurable social and environmental impact.
By investing in sustainable businesses and initiatives, we aim to promote long-term sustainability and social responsibility, while also generating competitive financial returns for our (potential) investors.
C. Investment strategy
Our objective is to provide funding and achieve a return on investment for our investors by making privately negotiated equity and equity-linked investments in targeted portfolio companies, i.e. private entities that are active in or have a focus on “learn tech”, primarily in seed stage. Our investments will be limited to entities located within Europe. By focusing exclusively on such entities, we seek to maximize our exposure to the European market and benefit from the economic growth and stability in Europe.
We consider the good governance practices of the portfolio companies as an essential component of our investment strategy. Prior to the respective investment, a thorough analysis of such governance practices is conducted as part of our overall risk and impact screening process. This includes the assessment of
the effectiveness of the portfolio company’s management body.
In addition, we shall commit to a continuous yearly monitoring of such good governance practices throughout the lifespan of the respective investment.
D. Asset allocation
In accordance with our investment strategy as set out above, we shall invest all assets made available for investments exclusively in portfolio companies that are active in or have a focus on “learn tech”. Our investments can be categorized as follows:
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100% of our investments include sustainable investments with environmental or social objectives (i.e., “#1 Sustainable” pursuant to the SFDR) (the “Sustainable Investments”); and
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0% of our investments include investments which do not qualify as sustainable investment (i.e., “#2 Not sustainable” pursuant to the SFDR).
In addition to the overview set out above, our Sustainable Investments can be divided as follows:
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0% of our Sustainable Investments will pursue environmental objectives, of which 0% will be Taxonomy-aligned; and
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100% of our Sustainable Investments will pursue social objectives.
E. Monitoring of sustainable investment objective
As we place great importance on (i) the ESG- and SIO-compliance and -practices of our portfolio companies, and (ii) the effective monitoring of their progress and growth in the respect, we shall require annual reports from each of our portfolio companies to effectively monitor their progress and growth in this respect. Such reports should provide specific details on their ESG- and SIO-procedures and -performance. We shall provide guidelines to assist with the formatting and content of such reports to ensure consistency and transparency across our portfolio companies.
F. Methodologies
To assess the ESG compliance, performance, and progress of our portfolio companies, we will conduct annual screenings which will involve a thorough analysis of the sustainability impact of each portfolio company, as well as an evaluation of any identified sustainability risks. In addition, the outcome of such annual screenings will be carefully analysed to identify areas of improvement and opportunities for growth.
In doing so, our goal is to ensure that our portfolio companies are making measurable progress towards our predetermined sustainability objectives while also mitigating any potential sustainability risks that could either compromise the “Do No Significant Harm” principle or impact the long-term sustainability of the portfolio companies’ business.
G. Data sources and processing
We will rely on data obtained from our portfolio companies. We aim to keep this information up to date through the annual screenings of such companies throughout the lifespan of the respective investment.
H. Limitations to methodology and data
Since we heavily rely on the data provided by our portfolio companies, it is crucial for our portfolio company to furnish us with accurate and truthful information. In this regard, we depend on their cooperation and transparency.
While we acknowledge this dependency, we are committed to closely monitoring the data collection process to ensure that our SIO are not compromised. Through careful oversight, we will work to mitigate any potential discrepancies.
I. Due diligence
Please refer to “C. Our sustainable investment objective”.
J. Engagement policies
We are committed to collaborating with each of our portfolio companies to develop a feasible strategy that will enable them to make measurable progress towards achieving their sustainability objectives while also mitigating any potential sustainability risks. This approach is designed to help our portfolio companies maintain their business operations in a sustainable and responsible manner.
To achieve this, we will work closely with each portfolio company to identify and prioritize their sustainability objectives and risks, taking into account the unique challenges and opportunities of their industry and operations. We will then develop a tailored strategy that outlines specific actions and targets for achieving these objectives and mitigating identified risks.
By partnering with our portfolio companies in this way, we believe we can create long-term value for both the portfolio companies and our investors, while also contributing to a more sustainable future for all.
K. Index as reference
We have not identified a specific index as a reference benchmark to meet the environmental and/or social characteristics.