Art. 10 SFDR – Sustainability-related information about financial products that promote environmental or social characteristics
Angel Invest Fund Management GmbH (“Angel Invest”) is the alternative investment fund manager of Angel Invest Fund III GmbH & Co. KG (the “Angel Invest Fund III”) within the meaning of the German Investment Code (Kapitalanlagegesetzbuch, KAGB) and as such publishes the following information in light of the consideration of sustainability-related aspects in accordance with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability disclosure requirements in the financial services sector (the “SFDR”).
Summary
This financial product promotes environmental or social characteristics but does not have as its objective a sustainable investment. The promoted characteristics are investment restrictions. 100% of the investments will be in line with its investment strategy and investment restrictions.
No reference benchmark has been designated to attain the environmental or social characteristics promoted by the financial product.
Zusammenfassung
Dieses Finanzprodukt bewirbt ökologische oder soziale Merkmale, strebt aber keine nachhaltigen Investitionen im Sinne der Definition des Art. 2 Nr. 17 SFDR an. Bei den beworbenen Merkmalen handelt es sich um Ausschlusskriterien. 100 % der Investitionen werden im Einklang mit der Anlagestrategie und den Anlagebeschränkungen getätigt.
Es wurde kein Referenzwert benannt, um die mit dem Finanzprodukt beworbenen ökologischen oder sozialen Merkmale zu erreichen.
No sustainable investment objective
This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.
Environmental or social characteristics of the financial product
The promoted characteristics of this product are investment restrictions.
Angel Invest Fund III may not invest, guarantee or otherwise provide financial or other support, directly or indirectly, to companies or other entities (A) whose business activity consists of an illegal economic activity (i.e., any production, trade or other activity which is illegal under the laws or regulations applicable to Angel Invest Fund III or the relevant company or entity, including without limitation, human cloning for reproduction purposes), or (B) which substantially focus on:
1. the production of and trade in tobacco and distilled alcoholic beverages;
2. the production of and trade in weapons and ammunition of any kind, it being understood that this restriction does not apply to the extent such activities are part of or accessory to explicit European Union policies;
3. casinos and equivalent enterprises; or
4. the research, development or technical applications relating to electronic data programs or solutions, which (x) aim specifically at supporting any activity referred to under (i) to (iii) above; internet gambling and online casinos; or pornography; or which (y) are intended to enable to illegally enter into electronic data networks or to illegally download electronic data, it being understood that this restriction does not apply to the extent such activities are part of or accessory to explicit European Union policies.
No reference benchmark has been designated for the purpose of attaining the environmental and social characteristics promoted by Angel Invest Fund III.
Investment strategy
The purpose of Angel Invest Fund III is to build, hold and manage in its own name and for its own account a portfolio of equity and quasi-equity investments in early-stage technology companies primarily in Europe or the United States.
No investments are made in the area of exclusions. As part of the due diligence and ongoing investment management, the investment team for Angel Invest Fund III will initially and continuously monitor whether the investment restrictions are abided by and whether the investment falls within the investment policies.
Policy to assess good governance practices of the investee companies
As part of the due diligence and ongoing investment management, the investment team will review whether a potential investee company has good governance practices in place. This might include using ESG (environmental, social, and governance) criteria to evaluate companies’ performance in areas such as labor practices, human rights, and corporate governance, conducting due diligence on investee companies to assess their management structures, employee relations, and tax compliance, engaging with investee companies through to encourage improvements in governance practices if necessary. The intensity of the assessment is carried out in accordance with the principle of proportionality. Where the Angel Invest sees higher risks of a non-compliance, they will intensify the audit.
Proportion of investments
Angel Invest Fund III will invest fully in line with its investment strategy and investment restrictions. Angel Invest Fund III will not invest a portion of its capital in any other asset class.
Monitoring of environmental or social characteristics
The investment team for Angel Invest Fund III will initially and continuously monitor whether the investment restrictions are abided by and whether the investment falls within the investment policies. Angel Invest Fund III will not make any investment in the excluded sectors unless previously approved by the advisory committee. Therefore, the achievement of the promoted ESG aspects – no investment within the excluded sectors – can be tracked in a simple way.
Methodologies for environmental or social characteristics
See above. The exclusion list is used to measure how the social or environmental characteristics promoted by the financial product are met.
Data sources and processing
Angel Invest Fund III receives data provided by the portfolio companies as part of the due diligence process and at regular intervals after the investment. Where necessary or beneficial, Angel Invest Fund III also makes use of publicly available data. Data processing is exclusively internal and DSGVO compliant. Estimates of data are not made.
Limitations to methodologies and data
Angel Invest is partly reliant on the information provided by portfolio companies during the due diligence process. Moreover, in the post-investment phase, Angel Invest is reliant on the company’s reported data. In both cases, complete data may not always be available due to the nature of the investments. The information is verified only if and to the extent misrepresentations are suspected.
Since Angel Invest Fund III’s investments are made for a multi-year investment period, Angel Invest places a high priority on establishing a trusting working relationship with the portfolio companies to ensure that data is submitted reliably and completely and that the above restrictions are met.
Due Diligence
Angel Invest considers the promoted ESG aspects when sourcing new portfolio companies for Angel Invest Fund III and during the due diligence on targeted portfolio companies. The due diligence is performed by obtaining all information relevant to Angel Invest Fund III using a due diligence questionnaire, which is then reviewed internally. If necessary, further specific information is also obtained from the potential portfolio companies, should this still be necessary after the detailed questioning. The due diligence process is not externally monitored.
Engagement policies
Angel Invest Fund III invests in the portfolio companies for a period of several years. Therefore, Angel Invest makes it a priority to establish and maintain a trusting working relationship with the portfolio companies in order to continuously comply with the investment restrictions. Angel Invest thus also intends to establish or strengthen the consideration of sustainability risks at the portfolio level. Angel Invest is in constant dialogue with the portfolio companies, but as a venture capitalist without majority ownership, the influence Angel Invest can exert on the portfolio companies is limited.
Last Version: 28 June 2024