Information provided pursuant to Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector

The main activity of illimity SGR S.p.A. (the “SGR” or the “Company”) is to provide collective asset management services by managing the assets and risks of alternative undertakings for collective investments (“AIFs”) in transferable securities or credits of a reserved, closed-end and Italian and non-Italian nature. To this end the Company sets up, administers, manages, organises, promotes and markets its AIFs and additionally performs all the activities required and ancillary to providing the above-mentioned asset management services in compliance with currently applicable laws and regulations. The SGR is not authorised to provide portfolio management services or investment advisory services or services relating to the receipt or transmission of orders, nor to market third-party Undertakings in Collective Investments (UCIs).

Over the past few years, sustainability matters (meaning environmental and social issues and those concerning employees, respect for human rights and questions regarding the fight against active and passive corruption) have taken on increasing importance in the sphere of financial regulation and the rules governing the markets and intermediaries. In this respect, the European legislative programme drawn up with the aim of making environmental, social and governance (ESG) criteria a key item in the regulation of financial services stands out, and this has led, inter alia, to the introduction of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 as amended (the “SFDR”) on sustainability-related disclosures in the financial sector.

It is the SGR’s intention to use this note as a means of complying with the disclosure requirements of the above-mentioned regulatory framework by adopting an “explain” approach, namely providing the reasoning used when considering the main negative impacts of its investment decisions on the ESG sustainability factors.

Sustainability is an integral part of the values and culture of the Company, whose aim is the development of a solid and sustainable activity in the long term. The Company’s pursuit of sustainable financial objectives enables investors and the markets to consolidate their trust, allows it to strengthen its reputation and permits it to combat the development of practices and activities which it believes are not in line with the principles underlying its policies.

By performing preliminary investigations, and also basing itself on the results of due diligence reviews, in making its investment decisions the SGR selects investments in accordance with its internal policies using criteria which, also in keeping with best market practice, provide for the exclusion of business sectors which may present material critical matters for sustainability factors, thereby resulting incompatible with the requirements of the AIF operating regulations applicable from time to time.

After assessing the specifics of its structure and the investment policies of the AIFs it manages, the SGR believes that at the present time no material sustainability risks arise from the provision of its services, although it cannot be ruled out that possible sustainability risks not built into the SGR’s investment decisions may have an effect on the expected return from the AIFs it manages.

As of today’s date, the Company is unable to carry out a comprehensive assessment of all the negative impacts that investment decisions may have on sustainability factors, within the meaning envisaged by article 4, paragraph 1, of the SFDR, for the following reasons: (i) a legislative framework and best practice that are likely to see further evolution and implementation (for example, the regulatory technical standards that establish detailed requirements for the contents, methodologies and presentation of the information on the sustainability indicators identified in the SFDR are still being finalised); and (ii) the non-availability of complete sustainability data for the managed assets held in the portfolios of the currently managed AIFs, required to make an assessment both at the investment stage and during the consequent reporting, also considering the features of the underlying portfolio.

Given the importance of sustainability factors, the SGR is currently assessing the possibility of revising and gradually adapting its internal procedures to amend and update these, if necessary, in light of the recent regulatory framework introduced by the SFDR. On completion of this process, expected by the end of the first half of 2021, the SGR will once again assess its position on publishing the negative impacts on sustainability factors and will provide customers/investors with an update on its website.