No consideration of adverse impacts of investment decisions on sustainability factors

Ardent Equity Management will consider ESG factors as part of the Fund’s investment process but, at this stage, will not consider adverse impacts of investment decisions on “sustainability factors” as specifically contemplated by the EU Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088) (“SFDR”). Despite Ardent Equity’s focus on and attention to sustainability and the sustainable growth of the companies we invest in, we are currently opting out from the consideration of Principal Adverse Impacts (PAI) due to a lack of readily available data to comply with the reporting requirements of the PAI Statement, as portfolio companies are not yet ready to make all necessary data available.

We intend to work towards considering adverse impacts of investment decisions on sustainability factors, as prescribed by the SFDR, in due course. We do consider and integrate sustainability risks in our investment decision making and portfolio risk management processes to the extent they create a potential or actual material risk and/or opportunity to maximize long-term risk-adjusted returns. During our investment process pre-screening phase, high importance ESG risks are assessed (e.g., exclusion list activities and sectors). During the due diligence phase, a review of legal, tax, financial and ESG risks are made. The scope of any ESG specific due diligence will be considered and, where relevant, amended to include the elements that are material to the target company’s business activities. In the investment final approval phase, the investment team will also highlight any material ESG risks that were identified during the due diligence phase. The investment committee is responsible for final investment decision-making based on a fund’s investment strategy and objectives and will in this context decide how or whether to accept ESG risks identified and how to monitor associated risks during the term of the relevant fund’s investment and divestment term.

This statement covers the reference period from 1 January 2023 to 31 December 2023. We will at least yearly revisit our decision not to consider PAI. Additionally, we continue to closely monitor regulatory developments with respect to the SFDR and other applicable ESG-focused laws and regulations, including the implementation of related and secondary legislation and regulatory guidance.