BlackCap Equity Management ApS (“BlackCap”) is a registered Alternative Investment Fund Manager (“Manager”) in accordance with the Danish Alternative Investment Fund Managers etc. Act. As Managers we perform all activities relating to the management of alternative investment funds (AIFs) in accordance with Annex 1, no. 1 and 2 of the Danish Alternative Investment Fund Managers etc. Act, including; Portfolio Care, Risk management and Administration.
At BlackCap we are committed to promoting sustainability and have signed the UN Principles for Responsible Investment. Hence, our ESG policies and processes are an integrated part of the entire screening, investment, and monitoring process.
The European Commission has developed a series of initiatives with the aim of redirecting capital towards sustainable businesses. One of the initiatives is the EU regulation 2019/2088, on sustainability-related disclosures in the financial services sector (SFDR).
BlackCap is considered a “financial market participant” under SFDR, since BlackCap is an alternative investment fund manager, which follows from points (1) and (2) of Article 2 of the SFDR.
The main purpose of SFDR is to improve transparency in the market for sustainable investment products, to prevent greenwashing and direct capital towards more sustainable investments.
ARTICLE 3 OF the SFDR
According to article 3 of the SFDR, financial market participantshall publish on their websites information about their policies on the integration of sustainability risks in their investment decision process.“Sustainability risk” is defined in the SFDR as an environmental, social or governance event (ESG) or condition which, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.
BlackCap’s ESG Policy and Responsible Investment Policy explains our approach to integrating the consideration of ESG risks and value creation opportunities into our investment process.
All sustainable practices of investment targets are evaluated as part of BlackCap’s due diligence process and ESG considerations discovered through that process may lead to BlackCap disregarding an investment solely on this ground.
ARTICLE 4 OF the SFDR
In accordance with article 4 of the SFDR, financial market participants – including alternative investment fund managers with less than 500 employees – can choose whether or not to consider principal adverse impact (PAI) of its investment decisions on sustainability factors.
Responsible investments are an integral part of BlackCap’s investment strategy and driven by the adoption of responsible business conduct codes and internationally recognised standards for due diligence and reporting such as the 10 Principles of the United Nations Global Compact and the Principles for Responsible Investment (PRI).
However, BlackCap has decided not to consider PAI’s in accordance with article 4 of the SFDR for their investment decision on sustainability factors for BlackCap Healthcare Services Fund, Asia. The reason being that the underlying investment occurs in an emerging market and not subject to EU regulations, hence it is difficult for BlackCap Managers to acquire the significant and specific ESG data needed to produce the information required to report on PAI according to article 4.
ARTICLE 5 OF the SFDR
In accordance with article 5 of the SFDR, financial market participants shall include in their remuneration policies information on how those policies are consistent with the integration of sustainability risks, and shall publish that information on their websites
BlackCap’s remuneration policy aims to ensure that sustainability risks are included in the overall risk parameters for remuneration. Furthermore, the remuneration policy aims to prevent financial incentives for excessive risk-taking with respect to sustainability risks, which may lead to adverse negative consequences for the return to our investors.