SFDR

Introduction

Under the Sustainable Finance Disclosure Regulation ("SFDR") and the Taxonomy Regulation, investment fund managers, such as Norbury Capital B.V. ("Fund Manager"), must provide sustainability information.

The Fund Manager is aware of the importance of sustainability and the role of the financial sector in it. The Fund Manager does not specifically focus on sustainable investments or promoting environmental or social features. As a result, the Fund managed by the Fund Manager does not promote ecological or social characteristics ("light green investments" as referred to in Article 8 SFDR) nor does it have a sustainable investment objective ("dark green investments" as referred to in Article 9 SFDR). This does not alter the fact that the Fund Manager is aware of sustainability risks and their possible effects on the return of the Fund it manages. Sustainability risks are therefore taken into account by the Fund Manager in its investment decisions.

Sustainability risk policies

For the purposes of this disclosure, a “sustainability risk” (as defined in SFDR) is an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment. These risks include, but are not limited to, climate change transition and physical risks, natural resources depletion, waste intensity, labour retention, turnover and unrest, supply chain disruption, corruption and fraud and human rights violations. A sustainability risk trend may arise and impact a specific investment or may have a broader impact on an economic sector, geography or political region or country. The impacts following the occurrence of a sustainability risk may be numerous and vary depending on the specific risk, region and asset class.

The alternative investment fund (the "Fund") managed by the Fund Manager focuses on a concentrated long-term portfolio of companies with strong business fundamentals and strong management teams. The investment process is driven by the selection of individual companies, not by sectors, countries or regions. The investment process focuses on what the Fund Manager deems high quality companies at

a reasonable valuation. When selecting investments, the Fund Manager will identify and assess potential sustainability risks. The Fund Manager’s framework, as it relates to evaluation individual business, considers the following parameters and integrates the following sustainability risks in its investment decisions:

- Environmental – A business’s effort to proactively reduce and improve its environmental exposure, thereby also improving its long-term sustainable competitive positioning. Examples of environmental risks to be considered by the Fund Manager are:

  • Increased taxation on environmentally damaging activities

  • Reputational risk as a consequence of harming the environment

  • Increasing input costs as a result of scarcity of materials and availability of supply

- Social – Businesses whose activities are beneficial to all stakeholders including employees, customers, society and shareholders. Examples of social risks to be considered by the Fund Manager are:

  • Reputational risk as a consequence of poorly managing customer or employee relations

  • Excessive employee turnover or difficulty to attract new talent as a result of a non-inclusive workplace

  • Loss of pricing power or ability to attract new customers due to declining customer satisfaction

  • Increasing regulatory burden as a result of resistance to certain business practices by society

- Governance – Businesses with a clear alignment of interest between management, employees and shareholders, including regular and transparent reporting. Examples of governance risks to be considered by the Fund Manager are:

  • Declining employee morale due to a mismatch between management compensation and that of other employees

  • Misrepresentation of underlying earnings power due to opaque reporting

  • Unfair and unbalanced communication to stakeholders

  • Misalignment between management and/or other large shareholders and minority shareholders

Not all sustainability risks may have a material negative effect on the value of an investment. Also, the relevancy of each sustainability risk may differ based on the economic sector the investment is active in. Therefore, the Fund Manager will assess available information to determine which sustainability risks are material to consider in the investment process.

Sustainability risks and remuneration

Under the AIFMD registration regime, the Fund Manager is not obliged to have a remuneration policy. Given the limited size of the organisation, it has been decided not to draw up a (voluntary) remuneration policy. The statutory director of the Fund Manager receives a fixed remuneration for their work which does not depend on individual performance (objectives). This prevents undesirable incentives (also in terms of taking sustainability risks). Under certain conditions, the Fund Manager receives a performance fee. The sole shareholder (currently the statutory director of the Fund Manager) can benefit from this performance fee. As a performance fee depends on the performance of the fund, undesirable incentives (in terms of taking sustainability risks) are limited.

Dated 17.06.2024

No consideration of adverse impacts of investment decisions on sustainability factors

The statement addresses requirements as set out in SFDR specifically relating to the consideration of principal adverse impacts of investment decisions on sustainability factors. Under this regulation, principal adverse impacts shall be understood as those impacts of investment decisions and advice that result in negative effects on sustainability factors.

The Fund Manager does not consider the adverse effects of investment decisions on sustainability factors and therefore does not prepare a so-called principal adverse sustainability impact statement (PAI statement) annually. As indicated above, the Fund managed by the Fund Manager does not promote ecological or social characteristics and does not have sustainable investments as its objective. Taking into account adverse effects of investment decisions on sustainability factors would bring that the Fund Manager must obtain necessary information to be able to report on those factors. The Fund Manager believes that there is currently insufficient reliable data available to determine the potential negative effects of investments in relation to sustainability. Where detailed data is available, it is often expensive to obtain and time-consuming to analyse. The Fund Manager believes that, also considering the nature, scale and the phase in which the Fund Manager finds itself (managing one Fund without promoting sustainable factors), the costs of including such effects in the investment process do not outweigh the expected benefits. At this stage, the Fund Manager does not consider principal adverse impacts of investment decisions on sustainability factors within the meaning of the SFDR regulation.

The foregoing does not prevent the Fund Manager from reconsidering the decision to not consider adverse effects of investment decisions on sustainability factors if relevant circumstances arise. For example, if the majority of investors value the consideration of adverse effects of investment decisions on sustainability factors (and thus a PAI statement). However, this is not anticipated at the time of publication of this information.