The Sustainable Finance Disclosure Regulation ("SFDR") came into law on 10th March 2021 in Europe. Article 23 of the AIFMD requires that disclosures must be made regarding (i) the manner in which sustainability risk management is integrated in the investment decision making process and (ii) the Manager's assessment of the likely impact of sustainability risks on the returns of each Sub-Fund.

Sustainability risk is defined as an environmental, social or governance event or condition which, if it occurs, would cause a material negative impact on the value of investments held in a Sub-Fund.

The Manager has incorporated the assessment of sustainability risks and opportunities in their investment decision making process. The assessment of sustainability risks has been integrated into the Manager's investment decision making employing a two-step process which is summarised as follows.

The first step is at a funds (pooled vehicle) level where an investment into a fund requires a sustainability assessment of both the management firm and the investment programme of the fund. The Manager's due diligence on the officers and staff of the management firm includes documentation on the steps the firm has taken to adopt ESG sustainability policies and principles and the general culture within the firm. Changes in staff or organisation may cause adverse changes in culture or policy so to monitor this risk the Manager requires the firm to report quarterly on those changes. The investment programme of the fund is researched to establish whether it has been classified under SFDR and if not, then what classification it would fall under. Financial market instruments are diverse but may be thought of as being distributed across a "sustainability impact spectrum" ranging from those which have no sustainability characteristics to those which are closely connected to sustainability risks and opportunities. The instruments used in the investment programme of the fund are identified and located on this spectrum to facilitate an assessment of the proportion of the investment programme that may be exposed to sustainability risks and opportunities. The Manager performs this assessment for each fund selected and aggregates the data to determine the proportion of each Sub-Fund that is potentially supporting eligible sustainable activities and the proportion exposed to sustainability risks.

The second step is at the single security level which may be held either through a fund or directly. The Manager uses the output from an institute dedicated to screening companies around the world for their ESG compliance and which scores each company on nine metrics. This process creates an exclusion list of companies which is sent periodically to each fund manager to identify any exposure to the exclusion list which they may have. A tolerance margin, currently set at 20%, allows each fund to hold up to 20% of its assets in excluded names without triggering any immediately required action. If this threshold is breached then the Manager engages with the fund manager to establish whether this condition is likely to be transitory or long term. If the condition is not transitory then the Manager will redeem from that fund. No direct long investments of any kind may be made in excluded companies although short positions are permitted.

Sustainability Risks

The Manager's focus on securities of issuers which maintain sustainable characteristics may affect the Sub-Funds' investment performance and may result in a return that at times compares unfavourably to similar funds without such focus. Sustainable characteristics used in a Sub-Fund's investment policy may result in such Sub-Fund foregoing opportunities to buy certain securities when it might otherwise be advantageous to do so, and/or selling securities due to their sustainable characteristics when it might be disadvantaged to do so. Over the short term, focus on securities of issuers which maintain sustainable characteristics may affect the fund's investment performance favourably or unfavourably in comparison to similar funds without such focus. Over the long term, we expect such a focus to have a favourable effect, though this is not guaranteed. Nevertheless, the application of ESG criteria may restrict the ability of a Sub-Fund to acquire or dispose of its investments at the expected price and time, which may result in a loss for such Sub-Fund. In addition, the ESG characteristics of securities may change over time, which may in some cases require the Manager disposing of such securities when it might be disadvantageous to do so from a financial perspective only. This may lead to a fall in the value of the Sub-Fund. The use of ESG criteria may also result in a Sub-Fund being concentrated in companies with ESG focus than that of funds having a more diversified portfolio of investments.

There is a lack of standardised taxonomy of ESG evaluation methodology and the way in which different funds will apply ESG criteria may vary, as there are not yet commonly agreed principles and metrics for assessing the sustainable characteristics of investments made by funds. In evaluating a security based on sustainable characteristics, the Manager is dependent upon information and data sources provided by internal research teams and complemented by external ESG rating providers, which may be incomplete, inaccurate or unavailable. Consequently, there is a risk that the Investment Manager may incorrectly assess a security or issuer. Evaluation of sustainable characteristics of the securities and selection of such securities may involve the Manager's subjective judgment. As a result, there is a risk that the relevant sustainable characteristics may not be applied correctly or that a fund could have indirect exposure to issuers who do not meet the relevant sustainable characteristics applied by such fund. In the event that the sustainable characteristics of a security held by a Sub-Fund change, resulting in the Manager having to sell the security, neither the Fund nor Manager accept liability in relation to such change. No representation nor warranty is made with respect to the fairness, accuracy or completeness of such sustainable characteristics. The status of a security's sustainable characteristics can change over time. Further, due to the bespoke nature of the sustainable assessment process there is a risk that not all relevant Sustainability Risks will be taken into account, or that the materiality of a Sustainability Risk is different to what is experienced following a sustainable risk event.

SFDR Classification

The Sub-Fund will be managed to conform with the requirements of an article 8 classification which in summary means the Manager of the Sub-Fund will seek to promote ESG characteristics.

The manner in which these characteristics have been integrated into the decision-making process is described in Part I of this prospectus with further explanation available from the Manager's website.

The Manager believes the likely impact from sustainability risks on the future returns of the Sub-Fund to be broadly mitigated by the Manager's commitment to focusing on investment opportunities with strong underlying ESG principles. Current data suggests that investments supporting sustainability have outperformed those which explicitly do not. However in the future this may temporarily stop or reverse if the divergence in valuations becomes extreme. Thinking and regulation on the topic of sustainability is evolving rapidly and it is possible that opinion and consensus changes regarding what is regarded as supportive to ESG sustainability. These are examples of high level risks arising from the sustainability trend (see section "Sustainable Risks"). In all cases the Manager does not see these risks as being any greater than those already being managed for in respect of sudden market corrections and believes that informed diversification across investment opportunities should successfully mitigate sustainability risks.