Governance

In terms of the Sustainability Financial disclosure regulation (EU) 2019/2088 (SFDR), imposed by the EU, effective from 10 March 2021, Orange Capital Partners (OCP) as Fund Manager of AIFM licensed funds, is required to disclose information on how sustainability risks and considerations are integrated in the investment decision processes. The SFDR is part of broader efforts of the European Commission to stimulate sustainable finance.

OCP firmly believes that good Environmental, Social and Governance (ESG) performance is synonymous with good business and will enhance the returns from its investments. In addition, ESG is important to OCP stakeholders and will not only protect asset value but also enhances the positive impact of our assets, which focusses on providing essential services to the community. Examples of our efforts in this field include (1) activities taken by the OCP Charity Foundation, which primary focus is to invest in the wellbeing of society and the environment through various projects, (2) initiatives during the investment holding period to improve environmental sustainable operational practices which represents good and responsible corporate citizenship.

It should be noted that OCP primary expertise lies in investing in high-quality real estate assets that generate long term, stable cash flows. OCP does not have a specific focus on sustainable investing or impact investing, and the funds that OCP manages do not promote any environmental or social characteristics, nor do they have sustainable investments as their objective. In the following paragraphs, OCP’s approach with regard to sustainability is explained in further detail.

OCP recognizes sustainability risks which may have a negative impact on the return of its funds. OCP defines sustainability risk as 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 an investment. OCP, as Fund Manager, has integrated sustainability risks as part of its investment decision-making and risk monitoring process for the regulated funds. During the due diligence phase of potential investments, OCP incorporates consideration of sustainability risks. Should there be any indication of a sustainability risk, during the due diligence phase, a more in-depth assessment will be performed, to determine either necessary risk mitigating activities or decline the transaction. Depending on the nature of the particular investment, OCP may retain legal, financial and/or environmental consultants to assist it with its diligence and portfolio monitoring. In addition, OCP may work with outside legal counsels and other consultants to evaluate, among other things, compliance with law, employee matters and corporate governance.

OCP has considered the nature and scale of its activities and the range of investments, and has concluded, in accordance with Art 4(1)(b) of the SFDR, that OCP do not consider the adverse impacts of its investment decisions on sustainability factors. OCP does not currently do so, because it cannot gather and / or measure all of the data on which it would be obliged by the SFDR to report. OCP will review this position periodically, at least on an annual basis, by reference to market developments.

Orange Capital Partners is compliant to the law, regulation and internal policies such as our Code of Conduct. Orange Capital Partners and its employees will act with integrity. This includes maintaining adequate and up-to-date data and reviewing policies. In accordance with the applicable law, Orange Capital Partners will use its reasonable best effort that legal requirements are met in the jurisdiction of establishment of a partnership and in each jurisdiction in which it operates and raises finance. Orange Capital Partners will seek to manage conflicts of interests fairly, both between itself and its partners and between the different partnerships and different investors and groups of investors. Orange Capital Partners will use its reasonable best effort for adequate protection of investors’ assets, whether it holds assets on behalf of investors or arranges for a third party to do so. Orange Capital Partners will use its reasonable best effort for proper staffing and resources in order to manage the partnerships and the assets under management.

OCP pays staff a combination of fixed remuneration (salary and benefits) and variable remuneration (including bonus). Variable remuneration is discretionary and dependent on the performance of the individual, the individual’s business unit, the AIFs, and the overall results of OCP. The fixed and variable components of total remuneration are appropriately balanced, and the fixed component represents a sufficiently high proportion of the total remuneration to allow the operation of a fully flexible policy on variable remuneration, including the possibility to pay no variable remuneration. Compliance with all OCP’s policies and procedures, including policies and procedures relating to the impact of sustainability risks on the investment decision making process, shall be considered as part of that overall assessment. The EU Sustainable Finance Disclosure Regulation (2019/2088) requires OCP to include in its remuneration policy information on how its policy is consistent with the integration of sustainability risks. Sustainability risk 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 the investment”