Integration of sustainability risks in investment decisions

The consideration of sustainability risks that may have a bearing on the potential or projected value or performance of the portfolio forms part of a wider assessment in the investment decision-making process at Caius Capital LLP (“Caius”). Caius undertakes extensive and tailored research and due diligence when evaluating potential investments, including regarding specific environmental, social or governance (“ESG”) factors that it believes may have a bearing on the potential or projected performance of the portfolios it manages. Such assessment of sustainability risks reflects ESG factors identified at the outset as well as factors which may become relevant due to changes in environmental or social conditions, changes in law or policy, market expectation, new information or research and other similar developments.

The degree to which sustainability risks are identified and evaluated varies across the asset class, and depends on the materiality of the impact that actual and potential risks may have on the returns of the specific investment or sector. Accordingly, certain asset classes may present a more effective opportunity than others in identifying and assessing sustainability risk using the tools and methodologies employed by Caius. For certain asset classes where ESG considerations are at a nascent stage of development, Caius continues to evaluate the most effective way to assess and monitor the sustainability risks associated with such investments.

Caius assesses the likely impact of sustainability risks on the returns of the investments contained in the portfolios it manages as part of its broader assessment of projected returns and risk management process.

“Sustainability risks” are ESG events or conditions, which, were they to occur, could have a material negative impact on the value of an investment held in a portfolio managed by Caius.

Sustainability risks may impact returns

The assessment of sustainability risks is a complex process involving evaluation of a number of factors and even when identified, there can be no guarantee that Caius will correctly assess the impact of sustainability risks on the investments it makes. Sustainability Risks may have a material adverse impact on the value of an investment, and a corresponding impact on the net asset value of portfolios managed by Caius and could, in certain circumstances, result in the total loss of value of the relevant investment(s) with a corresponding negative impact on the value of any such portfolio.

Over time and not necessarily for any given investment, Caius has identified certain sustainability risks as actually or potentially relevant to the portfolios that it manages.

Principal adverse impacts on sustainability factors

Caius does not consider the adverse impacts of its investment decisions on sustainability factors. Caius seeks to understand the environmental and social policies and outcomes of its investments where relevant information is available. However, Caius believes its portfolio investments do not currently produce consistent and comparable information to allow it to undertake a meaningful comprehensive assessment of the adverse impacts of its portfolio on specific environmental, social and other non-financial factors.

Accordingly, Caius does not currently consider the adverse impacts of its investment decisions on sustainability factors, other than as part of its wider investment research, risk management and risk monitoring processes. Where relevant, and, assuming sufficient data is available, such research and risk monitoring processes may include monitoring certain identified sustainability related issues affecting specific investments, including degradation of the environment caused by those investments.

Caius will continue to review the developments in the market and the availability of information and tools in order to assess the viability of more broadly considering the adverse impacts of investment decisions on sustainability factors.

Confirmation with respect to environmentally sustainable investments

The Funds and Accounts managed by Caius do not take into account the EU criteria for environmentally sustainable economic activities.