FFG CLEANTECH II
This is a marketing communication. Please refer to the FFG Fund prospectus and the KID on www.fundsforgood.eu before making any final investment decision. This document does not constitute any contractual document or investment advice.
Capricorn Partners is an independent manager of equity and venture capital funds, investing in companies with technology as a competitive advantage. Capricorn Partners est basé à Louvain, Belgique, et est reconnu par la FSMA.
Yves Vaneerdewegh & Olaf Coerper – Investment Managers at Capricorn Partners – manage the fund. Both Yves and Olaf have 30 years of experience in asset management with a focus on high growth companies involved in clean technology.
Formed in 2021 from the merger of DMS, MontLake and MDO, Waystone has over 20 years of experience in providing institutional governance, risk and compliance services to the asset management industry. Waystone is now a leading player in the industry.
INVESTMENT OBJECTIVES & POLICY
The fund aims to achieve long-term capital growth. It is actively managed without regard to a benchmark and invests mainly in equities of companies active in Cleantech technologies. The concept ‘cleantech’ encompasses all products and services that enable cleaner and more efficient use of natural resources such as energy, water, air and commodities. In addition, each company the fund invests in, contributes to at least one of the following three themes:
Renewable energy coming from natural sources that are not finite (sun, wind, hydro, etc.).
Resource efficiency means the sustainable use of natural resources to reduce our footprint on the environment.
Energy efficiency is a way of managing and limiting our energy consumption. A technology is energy efficient if it offers additional services with the same energy consumption, or if it provides the same level of services with less energy consumption.
|Launch of the strategy||01/09/2021|
|Type of fund||Equities|
|MANCO||Waystone Management Company (Lux)|
|Custodian Bank||Banque de Luxembourg|
|Country of registration||BE, LU, FR, ES|
|Minimum investment||1 unit|
|Duration of the fund||Unlimited|
RESPONSIBLE INVESTMENT POLICY
The sub-fund is categorised as a financial product promoting environmental and/or social characteristics as described in Article 8 of the “SFDR” regulation. Although it does not have a sustainable investment objective, the sub-fund will contain a minimum of 51% of sustainable investments. These environmental and/or social characteristics are implemented in the investment strategy through a thematic approach focusing on shares of so-called “Cleantech” companies, as mentioned above. In addition, the issuers of the securities held by the sub-fund meet certain sustainability criteria* defined by Funds For Good in its “Responsible Investment Policy”. These sustainability criteria include the exclusion of certain issuers, either because they are or have been subject to serious sustainability controversies or because the economic activities from which they derive their income could have a negative impact on sustainability factors. Further information on sustainability, the Funds For Good “Responsible Investment Policy” and the exclusion list can be found at www.fundsforgood.eu/bibliotheque-documents.
The Fund is a Towards Sustainability Label holder, an initiative to which Funds For Good is also a signatory. The aim of the Towards Sustainability label is to ensure that labelled products meet a minimum level of sustainability, as measured by the Towards Sustainability quality standard, and to provide relevant and useful information to help you determine whether the policy of a particular product is in line with your personal beliefs. The award of this label does not mean that the fund meets your own sustainability objectives or that the label meets the requirements of future national or European rules. For more information on this subject, see www.fsma.be/fr/finance-durable.
*The sustainability criteria are certified by the “Towards Sustainability” label. The assessment of the sustainability criteria is carried out by the manager, Capricorn Partners.
Risk & reward indicator: 4.
The risk & reward indicator is 4, as the value of the share may change significantly and therefore the risk of loss and the potential gain may be high. Historical data, such as that used to calculate this indicator, may not be a reliable indication of the future risk profile of the fund. There is no guarantee whatsoever that the risk indicator will remain unchanged, so it may change over time.
What does the synthetic risk & reward indicator represent?
Expressed on a scale from 1 (low risk with potentially lower return) to 7 (high risk with potentially higher return), the risk & reward indicator prescribed by law is determined on the basis of the fund’s volatility or sensitivity to the market. It reflects the fact that investments made in this sub-fund are subject to market fluctuations and the risks inherent in investments in securities. The value of investments and the income they generate can rise and fall and investors may not recover their initial investment. The sub-fund described above involves a risk of capital loss. The repayment of the initial investment is not guaranteed. The lowest category is not a risk-free investment. This risk indicator is also included in the “Key Investor Information” document. The figure is calculated for an investor in euros.
Which important risks are not adequately addressed by the synthetic indicator?
• Investing in shares involves counterparty risk in the sense that the issuing company may go bankrupt. This entails the risk of a significant or even total loss of the value of the investment made in these securities..
• Where a significant proportion of investments are made in financial instruments which are by nature sufficiently liquid, but nevertheless likely’ in certain circumstances’ to have a relatively low level of liquiditý this may, where appropriate, have an impact on the liquidity risk of the sub-fund as a whole.
• The investment by the sub-fund in emerging markets is exposed to the risk of political, regulatory, financial or fiscal instabilities or uncertainties which may adversely affect the value of such investments or even call into question the sub-fund’s right of ownership.
• The sub-fund may invest directly or indirectly in (convertible) bonds. Investment in Debt Securities involves a credit risk. If the issuer of a (convertible) bond is unable to pay the interest or repay the face value on time, this may result in a total or partial loss of value of the (convertible) bond. The downgrade of an issuer’s creditworthiness may also lead to a total or partial decrease in the value of the (convertible) bond.
There may be other risk factors which an investor should consider in light of their personal circumstances and particular present and future circumstances. Further information regarding the risks of investing in the sub-fund is set out in the Key Investor Information document and in the relevant section of the fund’s prospectus available from the management companý and on the website www.waystone.com.
information on sustainability
This financial product promotes environmental and social characteristics and, although it does not have a sustainable investment objective, it will contain a minimum of 51% sustainable investments.
The sub-fund invests mainly in shares of companies active in “Cleantech” or clean technologies, which cover all products and services that allow a cleaner and more efficient use of the earth’s natural resources such as energy, water, air or raw materials. In addition, the sub-fund will only invest in companies that comply with certain international human and labor rights standards and are not materially involved in socially controversial activities. Finally, the investment in this Sub-Fund allows, indirectly and through the Distribution Coordinator, Funds For Good, to promote the creation of jobs to fight against poverty.
b. No sustainable investment objective
This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.
Adverse impact indicators are being selected and monitored on an ongoing basis by the Investment Manager. Extreme negative outliers will be analysed more into detail and respective actions will be taken on a case-by-case basis (e.g. engagement with the respective companies or even exclusion of the respective asset) with the general goal to reduce adverse impacts.
Sustainable Investments are aligned with OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.
c. Environmental or social characteristics of the financial product
Clean Technologies: This Sub-Fund invests mainly in shares of companies active in Cleantech and listed on regulated markets. The notion of “Cleantech” covers all products and services that enable a cleaner and more efficient use of the earth’s natural resources such as energy, water, air or raw materials.
Compliance with international human rights and labor standards: This Portfolio will only invest in securities issued by companies that comply with international human rights, labor, environmental and anti-corruption principles, standards or frameworks.
Exclusion of controversial activities: This Portfolio will only invest in securities issued by companies that are not materially involved in economic activities considered harmful, such as (but not limited to) the manufacture and trade of arms, tobacco or coal.
Promoting job creation to fight poverty: In addition to the environmental and social characteristics promoted by the Portfolio through its investments, investing in this Portfolio indirectly generates a concrete social impact through Funds For Good, the distribution coordinator of the SICAV. After deducting its operating expenses, Funds For Good donates the greater of 50% of its net profits or 10% of its revenue to the social project it has created and manages, “Funds For Good Impact”. “Funds for Good Impact” dedicates all of its financial resources to the fight against poverty by promoting job creation. “Funds for Good Impact” grants interest-free, unsecured microcredits to people in precarious employment situations who have a business project. This financial support (coupled with human support in the form of coaching) enables these entrepreneurs to create their own business. More information is also available at www.fundsforgood.eu.
d. Investment strategy
The Sub-Fund aims at long-term capital growth. It is actively managed and, through a “thematic” investment strategy, invests directly in shares of companies involved in “cleantech” (clean technologies) and listed on regulated markets. Cleantech covers all products and services that enable a cleaner and more efficient use of the earth’s natural resources such as energy, water, air or raw materials. The Fund focuses on companies operating in sectors such as renewable energy, energy efficiency, water treatment, waste recycling, pollution control and advanced materials.
The fund also applies an “exclusion” strategy, whereby issuers of financial securities are excluded from the investment universe if they do not meet certain international standards and/or are involved in controversial activities above a pre-defined materiality threshold. This strategy is also based on an exclusion list of issuers (companies and/or states) in which the Fund may not invest.
Finally, Capricorn Partners is an active shareholder that invests a large portion of its assets under management in small and medium-sized growth companies in Europe, which may lead Capricorn to obtain a seat on the company’s board of directors. As such, Capricorn’s investment managers engage with portfolio companies in personal contact with management to discuss and promote ESG issues.
e. Proportion of investments
The Sub-Fund promotes environmental characteristics and will contain a minimum of 51% of sustainable investments with an environmental objective in economic activities that are not considered environmentally sustainable under the EU taxonomy. These economic correspond to one or more of the following investment areas of the Sub-Fund:
- Renewable Energy:
- Wind energy
- Solar energy
- Biomass & biofuels
- Other renewable energy
- Energy Efficiency:
- Green building
- Clean transport and fuel efficiency
- Controls and energy optimization
- Smart grid and energy storage
- Energy efficient lighting
- Resource Efficiency:
- Water management
- Pollution control
- Recycling and waste management
- Agricultural and bio-based solutions
- Advanced materials
Therefore, the Sub-Fund will contain a maximum of 49% of investments that are aligned with the environmental or social characteristics promoted by the Sub-Fund but are not considered sustainable investments.
f. Monitoring of environmental or social characteristics
The Investment Manager monitors the overall environmental or social characteristics on a yearly basis. The exclusion factors are controlled before every investment and on a regular basis after the investment.
The Fund invests in cleantech companies. The contribution of the investments to the environmental or social characteristics and the sustainable investment is measured by the following indicators, based on their availability:
1) EU Taxonomy Eligibility or EU Taxonomy Alignment for sustainable investments.
2) Positive alignment to the UN SDGs.
3) Internal Thematic Purity assessment by the Investment Manager, based on the information such as sector classifications (such as GICS), segment information provided by the company or other available and relevant information.
Compliance with international human rights and labor standards and the exclusion of controversial activities are monitored on the basis of financial and non-financial information published by the portfolio companies or by third-party data providers.
h. Data sources and processing
Before an investment is done, the Investment Manager uses Bloomberg as data provider, financial reporting from the investee companies, research reports from brokers and publicly available data to perform the necessary ESG assessment.
The Management Company uses MSCI Data for the investment restriction controls and/or calculations necessary for the creation of precontractual or periodic disclosures and for additional ESG related reports and publications.
Both, the Investment Manager and the Management Company ensure to have the respective license to obtain ESG data from the mentioned external data providers.
The exact proportion of data which is estimated by third party data providers is complex to calculate, may vary depending on the data provider, but is expected to be decreasing over time.
i. Limitations to methodologies and data
Neither the Investment Manager, nor the Management Company, nor the Coordinator of distribution can take any liability for the correctness of the assessment by external data providers and the correctness including the completeness of the analyses prepared by third party providers.
The Investment Manager, the Management Company and the coordinator of distribution have no influence on any disruptions or limitations (e.g. because of estimations) in the analysis and research preparation by third-party providers.
j. Due diligence
The Investment Manager monitors and analyses regularly the financial and non-financial performance of the portfolio companies, including the environmental, social and governance related risks and/or opportunities based on the mentioned external data provider and additional documentation of the underlying portfolio companies.
k. Engagement policies
The Investment Manager implemented an active engagement policy and interacts with the portfolio companies. The engagement and personal contact with the portfolio companies is especially used with regards to adverse impacts indicators, exclusions and related thresholds and the overall alignment of the portfolio companies with the environmental or social characteristics promoted by this product.