Articles 3(1), 4(1)(a) and 5(1) of the European Union Sustainable Finance Disclosure Regulation ("SFDR") impose obligations to make website disclosures at an entity level.
CVC Capital Partners' Luxembourg based fund vehicles are managed by CVC Europe Fund Management S.à.r.l ("CVC Europe"). CVC Europe, as an EU AIFM, is in scope for SFDR entity-level disclosures.
CVC Capital Partners' Jersey based fund vehicles are managed by their Jersey general partners as non-EU alternative investment fund managers ("Non-EU AIFMs").
The below disclosures therefore apply to CVC Europe as well as the following entities: CVC Capital Partners VII Limited, CVC Capital Partners VIII Limited, CVC Capital Partners IX Limited, CVC Capital Partners Asia V Limited, CVC Capital Partners Asia VI Limited, CVC Capital Partners Strategic Opportunities II Limited, CVC Capital Partners Strategic Opportunities III Limited and CVC Growth Partners II GP Limited (the "CVC Non-EU AIFMs").
CVC Europe and the CVC Non-EU AIFMs are referred to together in the below disclosure as "CVC". CVC, in making these disclosures, makes reference to the wider CVC group ESG policies and practices.
Product-level disclosures under SFDR are provided to investors under the relevant investor portal.
Article 3: Entity-level sustainability risk disclosures
CVC's Responsible Investment Policy sets out CVC's approach to the management of environmental, social and governance (ESG) issues, including the principles which we as an investment manager and advisor aspire to and the procedures we have implemented in order to integrate these principles into our activities. The Responsible Investment Policy covers all CVC private equity funds, the CVC Entities, existing portfolio companies as well as new acquisitions, all investment activities across the deal cycle, and CVC's own operations. All CVC staff are required to adhere to the ESG Policy.
Sustainability risk management is embedded in the way CVC seeks to make investment decisions and in its ongoing portfolio and asset management activities. CVC defines sustainability risk as ESG risk, which, if present, could lead to a material negative impact on the long-term value of one or more investments made by CVC, and ultimately negatively impact the value returned to its investors.
CVC's Responsible Investment Policy sets out how CVC embeds ESG issue management during the investment decision process. CVC assesses ESG risks and management standards of targeted companies when evaluating investment opportunities. CVC analyses inherent ESG risks and relevant management activities (to the extent that information is available) throughout the investment review stages, and any material findings are documented in the investment papers. To assist Deal teams with this analysis, CVC has developed a comprehensive ESG due diligence guidance and information tool based on internationally recognised SASB standards and an early stage ESG red flag checklist. CVC also has access to global business intelligence tools on compliance, ESG and business conduct risks which are used as part of the initial screening of potential investments. Where deemed necessary by the Deal team, CVC instructs external experts to perform ESG due diligence on target companies focusing on material risks and opportunities. If CVC concludes that the ESG risks of a target company are too great and cannot be appropriately mitigated, no investment is made.
The ESG Committee (which includes six Managing Partner representatives) is the main sponsor of the CVC ESG Policy and is accountable to the Boards of CVC Capital Partners SICAV-FIS S.A. and CVC Capital Partners (Luxembourg) S.à r.l. for its implementation.
Article 4: No consideration of adverse impacts of investment decisions on sustainability factors
CVC is continuing to assess the mandatory data collection and disclosure requirements which are applicable to firms which opt in to consider the principal adverse impacts of their investment decisions. Accordingly, CVC do not currently intend to consider the prescribed adverse impacts of investment decisions on sustainability factors within the meaning of Article 4 of SFDR; however, CVC shall keep this situation under ongoing review, considering the mandatory data collection and disclosure requirements applicable to firms which opt in. CVC confirms that ESG considerations are of great importance to CVC, including in the context of its investment decisions. Please see our Responsible Investment Policy and our Responsible Investing webpages for more detail on how we consider ESG factors in our investment decision making and during ownership.
Article 5: Entity-level remuneration policies disclosures
In practice, in accordance with general private equity remuneration and award processes, a significant portion of an investment professional's compensation is typically in deferred instruments aligned to the performance of investments, meaning that the value of an investment professional's compensation will be negatively impacted by a sustainability risk that impacts the value of the underlying investment.
Last updated: December 2022