Sustainabilityrisk means an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment (Article 2(22) SFDR).

The AIFM does not integrate sustainability risks into its investment decision-making process. The AIFs invest primarily in early-stage technology companies. The due-diligence process focuses on the factors that drive value at this stage of development on technology: differentiation, founding team, market opportunity, and financial dynamics.

In the assessment of the AIFM, sustainability risks are not likely to have a material impact on the returns of the AIFs’ investments. At the seed and early-growth stages targeted by the AIFs, value creation is primarily driven by execution, technology adoption, and financing. Sustainability risks are real but remain modest relative to these structural risk factors and are already captured within the standard financial and operational due-diligence conducted prior to each investment decision.

The AIFM will periodically review this assessment and will update this disclosure if its investment approach or the applicable regulatory framework changes.

The AIFM does not consider the principal adverse impacts (PAI) of its investment decisions on sustainability factors, within the meaning of Article 4(1)(b) of the SFDR.

As a registered alternative investment fund manager within the meaning of Article 3(2)(b) of the AIFMD, supervised by the CSSF and employing fewer than 500 staff, the AIFM is not subject to the mandatory consideration set out in Article 4(3) and 4(4) of the SFDR. The decision not to consider principal adverse impacts is based on the following reasons:

• The limited size and scope of the AIFM’s activities make the cost of applying the full PAI due-diligence and indicator-reporting regime under Commission Delegated Regulation (EU) 2022/1288 disproportionate relative to the size of the AIFM;
• The AIFs’ portfolio consists of early-stage companies that are not required to track or disclose the PAI indicators prescribed under the SFDR Regulatory Technical Standards. No reliable or sufficiently accessible data is available from which a meaningful PAI analysis could be conducted;
• At the seed and early-growth stages, the sustainability footprint of portfolio companies is typically low to modest and not determinative of value creation or destruction. Primary risk factors are technological, commercial, and team related.

The AIFM does not intend to consider principal adverse impacts of investment decisions on sustainability factors in the near future.

As a registered alternative investment fund manager under Article 3(2)(b) of the AIFMD, The AIFM is not required to maintain a formal remuneration policy under the AIFMD remuneration regime applicable to authorised managers.

Accordingly, sustainability risks are not taken into account in the determination of remuneration, and the compensation structure of the AIFM does not create incentives to take on sustainability risks inconsistent with the risk profile of the AIFs.