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Information required under the EU Sustainable Finance Disclosure Regulation

Integration of sustainability risks

Apera Asset Management GmbH (“Apera”), as investment firm licensed by the German Federal Financial Supervisory Authority (BaFin) to provide investment advice and discretionary portfolio management services, is required to disclose information about its policies on the integration of sustainability risks in its investment advice and investment decision-making process according to Regulation (EU) 2019/2088 (“SFDR”).

Integration of sustainability risks into investment advice and investment decision-making process

Apera integrates sustainability risks into its investment advice and investment decision-making process.

Sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment.

Apera’s policy on the integration of sustainability risks in its investment advisory and investment decision-making process is as follows:

Apera recognises the impact underlying investments of funds for which it acts as investment advisor or portfolio manager may have on the environment and society.  As such, Apera is committed to considering material environmental, social and governance (ESG) issues during its due diligence and in the monitoring of portfolio investments, subject to the provisions of the partnership agreement and the offering memorandum of the funds in relation to which it acts as investment advisor or portfolio manager. For the purposes of this disclosure, “material” ESG issues are defined as those issues that Apera determines to have a direct and substantial impact on an organisation’s ability to create, preserve, or erode economic value, as well as environmental and social value for itself and its stakeholders.

In January 2018, the Apera group further elevated its ESG commitment by becoming a signatory to the United Nations Principles of Responsible Investment (the “UNPRI Principles”). In becoming a signatory, the Apera group formalised a commitment to achieving high standards of corporate governance, business integrity and professionalism in all activities. As such, Apera’s ESG Policy is based on guidelines that are consistent with these principles.  

Apera believes that incorporation of ESG issues in the investment advisory and investment decision-making process can positively affect the performance of investment portfolios and that applying the UN PRI Principles may better align investors with broader objectives of society. 

Investment advice to Apera funds

Apera considers material ESG issues throughout its activities as investment advisor to the Apera funds, from due diligence to portfolio monitoring. The level of ESG related work is performed on a risk basis, with key considerations including the industry the business operates in, the locations it operates in and its ownership and business structure.

At the origination stage, Apera will identify any ESG red flags and consider jurisdictional ESG issues such as local governance, legal systems, ESG policy and regulation.  At the due diligence stage, Apera will conduct ESG due diligence and include an ESG summary, as applicable, in the fund’s investment memorandum. 

Apera will encourage the companies which it recommends for investment to consider relevant ESG issues, with the goal of improving performance, minimising adverse impacts in these areas and ultimately providing long-term sustainability for the benefit of multiple stakeholders of their clients. Apera will include ESG reporting requirements for borrowers in terms. During the investment holding period, Apera will carry out on-going ESG monitoring, support improvements at the companies which it has recommended as investment to consider relevant ESG issues, identify the potential positive impacts of ESG considerations at the investment level and provide ESG reporting to investors. Examples of engagement activity include requesting management changes (e.g. board independence) and including ESG agenda items in regular borrower meetings.

Restricted areas

Apera maintains a robust list of explicitly avoided areas for investment recommendations and investment decisions including, but not limited to, the following areas:

  • Companies that utilise child or forced labour;
  • Companies that maintain discriminatory policies;
  • Gun-manufacturing;
  • Tobacco; or
  • Pornography.

Apera’s commitment to responsible investing extends beyond its investment advisory and portfolio management activities. Apera embraces the ESG impact of its own operations by upholding high standards of business conduct, being a responsible employer and creating an equal opportunities culture.

The purpose and ultimate goal of this ESG work is that Apera not only adheres to all relevant regulations and compliance demands, but also that the work Apera does in the context of its investment advisory and investment decision-making process and across its portfolio companies contributes positively to employees and, therefore, to society at large.

No consideration of adverse impacts of investment advice or investment decisions on sustainability factors

Sustainability factors are environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

Apera does not currently consider adverse impacts of its investment advice or investment decisions on sustainability factors as it is currently not in a position to obtain and/or measure all data required to report under SFDR, or to do so systematically, consistently and at a reasonable cost with respect to all its clients. Underlying investments are not widely required to, and may not currently, report by reference to the same data, which creates a challenge. Additionally, the lack of reliable estimates to effectively combat data gaps in most jurisdictions is not conducive, making the data non-comparable.

Apera’s management will keep this decision under review as market practice and data availability continues to evolve.

Information on how Apera’s remuneration policies are consistent with the integration of sustainability risks in its investment advisory and investment decision-making process

Apera is required to publish information on how its remuneration policy is consistent with the integration of sustainability risks in the investment advisory and investment decision-making process. Apera’s approach to remuneration promotes sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk appetite or the risk profile of the portfolios in relation to which it provides investment advice or discretionary portfolio management services. Apera considers that integration of sustainability risk considerations, where relevant to investment performance, is consistent with its remuneration policy, as such considerations can positively affect the performance of the investment portfolios for which it acts as investment advisor or portfolio manager.

Date of publication: 10 March 2021

First update: 24 June 2024*

*In this update, only the wording was revised. The content of the information remained unchanged.

Last update: 07 December 2024**

** This update considers the fact that Apera received a license as portfolio manager and will offer discretionary portfolio management services in addition to investment advice from the time of the update. Therefore, additional information was included about Apera’s policies on the integration of sustainability risks in its investment decision-making process and the consideration of adverse impacts of Apera’s investment decisions on sustainability factors.

LEI Apera Asset Management GmbH: 213800QRM5V2DH5B3I63