Sustainability-related Disclosures

1. Principles for Responsible Investment (PRI)

Fortitude Capital – Sociedade (“Fortitude”) will invest according to the United Nations’ Principles for Responsible Investment (PRI).

Fortitude recognises and values the importance of the responsible investment criteria within the financial system and its responsibility as funds’ management entity to influence invested companies to introduce responsible management principles. Therefore, taking into account the interests of our investors and other stakeholders, we seek to increasingly incorporate a set of values and principles of responsible investment into our activity in the various decision-making processes throughout the life cycle of each investment.

2. Integration of sustainability risks into investment decision-making process

Under Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 (SFDR), a sustainability risk means an environmental, social and governance (ESG) event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.

Fortitude, as a diligent and careful management entity, in performing the mandates attributed to it under the management regulations, shall take into account the various risks that may be relevant for the funds’ investments, including sustainability risks that may exist.

Our decision-making process is based on the following general principles:

− Commitment: It is our responsibility to identify and monitor not only the more traditional risks (such as market, credit, liquidity and operational risks, among others) that may impact the value of investments, but also the above-mentioned sustainability risks that may also impact them.
− Adaptability: The consideration of sustainability risks will be done on a case-by-case basis, depending on the circumstances and characteristics of our funds and of the target companies.
− Proportionality: As with the remaining risks, sustainability risks are weighted according to the nature, scale and complexity of the investments to be made and in proportion to the size of Fortitude and its funds and the costs involved.

These principles are applied throughout the various stages of the decision-making process:

− Screening: In the process of detecting possible investment opportunities, based on publicly available information and/or from third parties, including specialised service providers, exposure to sustainability risks will also be considered. As an ancillary element, lists of sectors of activity more and less exposed to this type of risk could be elaborated and updated from time to time.
− Investment analysis: The information collected in the previous stage will be complemented, whenever appropriate, with additional elements of information, namely from the target company itself, that will allow a more detailed assessment of the existence of such risks.
− Due Diligence: Whenever appropriate and when conducted in collaboration with external consultants, due diligence processes should take account of such risks in the analysis undertaken and suggest mitigation measures.
− Investment decision: The information collected and analysed in the previous stages, in relation to sustainability risks, should be considered in the decisions to be adopted, including the implementation of appropriate mitigation measures if these risks are detected, such as through shareholder engagement with the target company.
− Portfolio monitoring: Among the matters subject to regular monitoring throughout the duration of the investments, sustainability risks will be considered, whenever relevant, and the respective mitigation measures will also be reviewed, when convenient.

Accordingly, the impact of such risks on the value and return of the investments shall be assessed case-by-case, being in such extent integrated in the investment decision process of Fortitude as management entity.

3. Non-consideration of the adverse impacts of investment decisions on sustainability factors

Fortitude does not take into account the adverse impacts of investment decisions on sustainability factors and does not meet the requirements for large financial market participants set out in Article 4(3) and (4) of the SFDR.

Without prejudice to its diligent and careful action under the mandates assigned to it under the management regulations, Fortitude does not take into account the adverse impacts of investment decisions on sustainability factors for the following reasons:

− We do not manage funds that fall within the scope of Article 8 or Article 9 of the SFDR.
− The investments underlying the funds under our management do not take into account the European Union criteria for environmentally sustainable economic activities.
− Considering the type of investments made by our funds, the level of public information available on ESG, in particular in regard to the indicators listed in Annex I of the Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022, is not sufficient, which prevents a reasonable consideration of the negative impacts of investment decisions on sustainability factors based on that information.
− As there are no sufficient public sources of information on this matter, the consideration of the adverse impacts of investment decisions on sustainability factors would imply obtaining this information externally, either through service providers or by the invested companies, but even by this means it is anticipated that in many cases the available information would be insufficient, considering the companies where the investments are typically made.

Therefore, not only would this process impose excessive and disproportionate costs for Fortitude and its funds, but also the necessary result for the effective consideration of the referred adverse impacts would not be assured.

If in the future the circumstances listed above change, Fortitude may reconsider this matter and, in such case, will inform, in a timely and appropriate manner, its investors and other stakeholders of any such change.

4. Remuneration policy

Fortitude recognises that the remuneration policy plays a central and important role in aligning the relevant interests, namely those of investors and other stakeholders, and should also be able of ensuring appropriate conditions for the implementation of fair remuneration, capable of attracting, retaining and motivating our managers and employees.

Notwithstanding, sustainability risks are not currently integrated autonomously into our remuneration policy for the following reasons:

− We do not manage funds that fall within the scope of Article 8 or Article 9 of the SFDR.
− The current circumstances, namely in terms of available information, are not the most appropriate for the inclusion of this type of risk.

Despite the above, we will not refrain from reassessing, over time, the opportunity of integrating sustainability risks in our remuneration policy, in which case we will update the information provided herein.

Last updated 24/05/2023