Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial
services sector

Under the 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 (the “SFDR”), POLYVALENT CAPITAL MANAGEMENT LIMITED (the “Polyvalent AIFM” or “We”) is required to comply with certain sustainability disclosure requirements.

Under the Alternative Investment Fund Managers Law L.56(I)/2013 (as amended) we are authorised by the Cyprus Securities and Exchange Commission (the “CySEC”) to operate as an alternative investment fund manager (AIFM) of various alternative investment funds (the “AIFs under management”) which constitute financial products under the SFDR, and we thus qualify as a financial market participant under the SFDR.

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Please click on the below sections to navigate through our sustainability disclosures under Articles 3(1), 4(1)-(4) and 5(1) of the SFDR.

Transparency of sustainability risk policies:

This section serves to fulfil the requirements under Article 3(1) of the 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 (the “SFDR”), under which we shall publish on our website information about our policies on the integration of sustainability risks in our investment decision-making process.

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Under Article 2(22) of the SFDR, ‘sustainability risk’ means 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 investment.

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As part of our sustainability-related disclosure requirements under the SFDR, we declare that we have policies in place to integrate sustainability risks into our investment decision-making process to a reasonable extent.

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At Polyvalent AIFM, we understand that sustainability risks can potentially have a material impact on long-term financial performance as such risks can rarely be separated from financial and commercial risks.

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Further, we conduct due diligence on our investments, and we make efforts to reach our investors’/client’s long-term investment objectives by using sustainability-related data that help us to identify sustainability risks at various steps of the investment decision-making process. Additionally, we are monitoring our related processes and enhancing them on an ongoing basis to ensure that we integrate sustainability risks into our decisions to the relevant and meaningful extent possible.

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Finally, our relevant employees involved in the provision of various services (portfolio management, risk management, compliance, etc.) are being trained with regards to sustainability risks in order to understand the processes, sustainability policies and our philosophy.

Transparency of remuneration policies in relation to the integration of sustainability
risks

This section serves to fulfil the requirements under Article 5(1) of the 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 (the “SFDR”), under which we shall include in our remuneration policies information on how those policies are consistent with the integration of sustainability risks and shall publish that information on our website.

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Under Article 2(22) of the SFDR, ‘sustainability risk’ means 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 investment.

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We understand that sustainability risks can potentially have a material impact on long-term financial performance as such risks can rarely be separated from financial and commercial risks and therefore, we maintain relevant sustainability risk policies. Please refer to the section “Transparency of sustainability risk policies” for more details on integration of sustainability risks.

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In addition to the above, in accordance with the legal and regulatory requirements applicable to Polyvalent AIFM under the Cyprus and EU law, we have in place a remuneration policy, namely the “Personnel Recruitment, Remuneration and Evaluation Manual” that, inter alia, sets the remuneration procedures followed by Polyvalent AIFM and it is applicable to our staff and Management Body of Polyvalent AIFM.

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As part of our sustainability-related disclosure requirements under the SFDR, we declare that we currently integrate sustainability risks in our remuneration policies only to a certain extent.

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At this stage, our Personnel Recruitment, Remuneration and Evaluation Manual inter alia:

• aims to treat personnel and job applicants solely on the basis of their merits, regardless of gender, colour, ethnic or national origin, age, background, disability, religious or political beliefs, family circumstances, sexual orientation or other irrelevant distinction.
• makes a distinction between the fixed and variable remuneration of the total remuneration.
• ensure that the total remuneration amount is based on a combination of: (i) the assessment of the performance of the individual by taking into account both financial and non-financial criteria, (ii) the performance of the business unit or AIF under management concerned and (iii) of the overall results of Polyvalent AIFM.
• ensures that the variable remuneration is performance-based and risk adjusted.
• promotes sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profiles, rules or instruments of incorporation of the AIFs under management. We will closely follow the market and regulatory developments and will consider the regulatory guidance and industry consensus on measures that will need to be taken in the near future, so as to enhance our remuneration policies over the time if it is deemed necessary.

Transparency of adverse sustainability impacts at entity level

This section serves to fulfil the requirements under Article 4 of the 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 (the “SFDR”), under which we shall publish and maintain on our website whether we consider principal adverse impacts of investment decisions on sustainability factors or not.

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Under Article 2(24) of the SFDR, ‘sustainability factors’ mean environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. At Polyvalent AIFM we foster sustainability in our investment decisions, however for the time being we do not consider principal adverse impacts of investment decisions on sustainability factors in the manner prescribed in Article 4 of the SFDR. The main reason for this is that currently it is not feasible to undertake a systematic and/or comprehensive consideration of principal adverse impacts on sustainability factors and also at this stage several relevant
regulatory requirements at EU level are still outstanding.

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At a later stage, we may decide to re-visit our above position and in such case we will make available on our website a detailed way of dealing with these principal adverse impacts on sustainability factors.