Fund

Gardant Investor SGR has set up, promoted and currently managed the reserved closed end AIF Italian Distressed Debt & Special Situations Fund which invests on the Italian market in secured and unsecured non-performing loans (NPL/UtP).

The Fund started its operations in October 2021.

 

 

Gardant Investor SGR has set up, promoted and currently manages the reserved closed end “FIA” Forward fund , which mainly invests on the Italian market in different asset classes.

The Fund started its operations in September 2021.

Terre Agricole Italiane is the reserved real estate AIF promoted by Gardant Investor SGR.

An innovative solution that will meet the current needs of the market, dedicated to the investment in agricultural land and real estate property connected to the agriculture business, mainly located in Italy and other EU member states, in order to support the real economy and actively contribute to the development and relaunch of the agri-food sector, an essential infrastructure for our country. An investment proposal taking into consideration sustainability issues (in line with the provisions of Article 8 of EU Regulation EU 2019/2088, thus promoting ESG characteristics), aimed at supporting the process of evolution, transition and growth of Italian agriculture.

 

The Fund has a target of 500 million Euros.

 

Sustainability disclosure excerpt

The complete disclosures required pursuant to Reg. (EU) 2019/2088 (complete Web Disclosure under Art. 10 and Pre-contractual Disclosure for Art. 8 financial products) of the Terre Agricole Italiane alternative reserved real estate AIF are available in the reserved area dedicated to investors.

Summary

Terre Agricole Italiane fund is qualified as a financial product that, pursuant to Article 8 of Regulation (EU) 2019/2088 (also referred to as ‘SFDR’), promotes environmental and social characteristics but does not have sustainable investment as an objective.

Specifically, the environmental features promoted by Terre Agricole Italiane fund involve:

• Supporting the use of biological, regenerative, and conservation farming techniques;
• Limiting the chemical contamination of soil, groundwater, and air, by reducing the use of chemical fertilizers and pesticides;
• Stimulating biological agriculture and limiting the use of artificial fertilizers, herbicides, and pesticides;
• Encouraging crop rotation in order to stimulate greater environmental and ecological variability, as well as to reduce the persistence of ecosystem disruptions such as parasite outbreaks;
• Reducing greenhouse gas emissions originating from the agricultural sector by promoting the use and production of energy from renewable sources;
• Supporting the modernization of the agricultural equipment through the use of Agriculture 4.0 techniques and technologies to reduce emissions from agricultural vehicles, pesticide use, and water consumption;
• Stimulating the use of “precision farming” technologies to reduce the consumption of natural resources and increase the quality and quantity of production.

Terre Agricole Italiane fund promotes the environmental objective listed in point (f) of Article 9 of Regulation (EU) 2020/852 “protection and restoration of biodiversity and ecosystems” but does not undertake sustainable investments that address the EU criteria for environmentally sustainable economic activities and, therefore, does not contribute to the environmental objectives listed in Article 9 of Regulation (EU) 2020/852.

The social features promoted by the product involve:

• Increasing employment, particularly of young farmers;
• Facilitating agricultural entrepreneurship, in particular, that of young people;
• Increasing the presence of young people and/or women employed in the agricultural sector;
• Facilitating the participation of agricultural operators also located in rural areas;
• Promoting knowledge transmission and innovation in the agricultural sector, including rural areas;
• Strengthening agricultural income and boosting competitiveness

Specific clauses will be included in the rental contracts to monitor the environmental and social characteristics listed above.

For the monitoring and assessment of each environmental and social characteristic promoted by the fund, specific indicators (KPIs) have been identified.

No designated reference benchmark for Terre Agricole Italiane fund has been identified.

Investment strategy

As described in the Group’s ESG Policy and the SGR’s Responsible Investment Procedure (available on the website), Gardant Investor SGR is committed, where applicable, to incorporate ESG factors into its investment decisions by also assessing good governance practices in its exclusion policy. Furthermore, the SGR’s Risk Management function undertakes an assessment of potential negative impacts associated with the value of investments also through ESG risk screening.

Proportion of investments

The percentage of the financial product’s investments used to comply with environmental or social characteristics promoted by the financial product is 66%.

Data sources and processing

In order to fulfill each environmental or social characteristic promoted by the financial product, data are provided by the various counterparties and Gardant Investor SGR’s internal information systems. The data support the internal tool which makes it possible to identify, assess and monitor parameters related to the social and environmental characteristics promoted by the product.

Limitations to methodologies and data

The data and information provided to the internal tool monitoring environmental or social characteristics are subject to the availability of the counterparty.

Due diligence

With respect to investment decisions, technical, sustainability, and legal due diligences are undertaken. Counterparties are asked for a set of documents/evidence to attribute an ESG score through the use of an internal tool that allows for a preliminary screening. In addition, these analyses are also taken into consideration by the Risk Management Function.

Engagement policies

One of the binding elements of Gardant Investor SGR’s investment strategy is the a priori exclusion from the investments of the following:

• companies operating in clear conflict with the principles established by international standards and conventions (e.g., in violation of the United Nations Global Principles);
• companies operating in controversial sectors and activities, belonging to specific exclusion lists, by setting thresholds based on a company’s revenues during the previous four quarters. This negative ESG screening specifically relates to companies operating in controversial weapons (any threshold), coal (threshold of 20% of each company’s revenues during the previous four quarters), conventional weapons (30% of each company’s revenues during the previous four quarters), tobacco (20% of each company’s revenues during the previous four quarters), gambling (20% of each company’s revenues during the previous four quarters) and adult entertainment (any threshold);
• government issuers that are under the sanction regime of the United Nations, pursuant to Article 31 of the UN Charter.

In addition, the assets allocated will always aim to ensure that water-efficient practices (e.g., reduction of consumption and adoption of new techniques) and optimization of resources used for agricultural production (e.g., reduction of waste and use of chemical fertilizers and pesticides) are adopted for each investment.

Gardant Re-Credit is the reserved closed-end AIF promoted by Gardant Investor SGR.

Gardant Re-Credit has a focus on investments in «secured» UTP credits and single names secured by mortgages and, to a lesser extent, the acquisition and enhancement of distressed real estate projects, as well as the granting of single name loans secured by mortgage.

Gardant Re-Credit’s investment strategy pursues a direct positive impact on the real economy, directly affecting the companies with which restructuring processes are initiated, ensuring compliance with the following monitorable ESG principles (Article 8):

1. i) Equality in the treatment of employees, fair remuneration system and equal opportunities for all employees regardless of gender and age;
2. ii) Development, enhancement and updating of professional skills through training plans for all categories of employees;
3. iii) Health and safety of workers

Furthermore, all credit management strategies pursue the objective of allowing the debtor to return to play an economically active role in the community and to relaunch businesses experiencing times of difficulty. The aforementioned agreements between the parties provide for the modification of the contractual conditions in favor of the debtor on condition that the latter achieves specific ESG targets, agreed between the parties and binding on them. In addition to the “direct” objectives in line with the qualification of article 8, the Fund will always act with the aim of restoring and making the real estate assets securing its credits more efficient.

The Fund has a funding target of 200 million euros.

 

Sustainability disclosure excerpt

The full disclosures required pursuant to Reg. (EU) 2019/2088 (Full Web Disclosure under Art. 10 and Pre-contractual Disclosure for Financial Products under Art. 8) regarding the RE-Credit reserved AIF are available in the restricted investor area.

Summary

Gardant RE-Credit fund (the “Fund”) is classified as a financial product that, in accordance with Article 8 of Regulation (EU) 2019/2088 (also referred to as the “SFDR”) promotes social characteristics, in line with the most relevant international standards. In particular, the Fund aims to guarantee economic, social and human rights in business activities and relationships and to promote sustainable and inclusive economic growth, along with productive and decent employment.

Specifically, the social characteristics promoted by the product relate to:

• uniformity with respect to employee treatment, a fair pay system and equal opportunities for all employees regardless of gender and age, ensuring that the level of remuneration by gender and the composition of the workforce are at least equal to the average calculated within the debtor’s company sector and will progressively reduce any gap that between the company’s remuneration and gender composition average levels that might be detected;
• development, enhancement and updating of professional skills through training plans for all employees’ categories, in order to guarantee the same opportunities of growth, also facilitating the acquisition of skills and long-lasting learning, ensuring an average number of training hours at least equal to the average of the debtor’s company sector and the progressive increase of the aforementioned average number of hours;
• workers’ health and safety, ensuring an injury ratio below the average for the borrower company’s sector.

To pursue the above-mentioned social characteristics, the Fund promotes the establishment of debt restructuring or recovery plans for indebted companies and out-of-court agreements that have as object the social characteristics promoted by the Fund itself; furthermore, all credit management strategies pursue the objective of enabling the debtor to re-engage in an economically active role in the community. The above-mentioned agreements between the parties provide for the modification of the contractual conditions in favor of the debtor on condition that the debtor achieves specific ESG targets, agreed between the parties and binding on them. The qualitative-quantitative targets of the agreements may concern the level of health and safety at work, wage inequality between men and women, support for equality and inclusion, and qualifying training.

Investment strategy

Gardant Investor SGR has incorporated ESG analysis into the Fund’s investment process, in line with the Group’s ESG Policy and the SGR’s Responsible Investment Procedure (available on the website). ESG Risk is assessed, both at Fund and individual investment level in both the pre-investment and monitoring phases, through a qualitative indicator determined based on the following elements:

• ESG due Diligence whose objective is to identify, from the portfolio acquisition phase, virtuous companies in relation to ESG criteria, through the evaluation of specific KPIs;
• ESG safeguards as the subject of binding contractual clauses for the counterparty, also associated with the achievement of the Fund’s target objectives.

Sustainability risk analysis has also been incorporated within the investment process through the involvement of the Risk Management function, which also considers sustainability risks within its framework.

Both during the due diligence phase and the post-investment one, the target company’s governance policies and practices are assessed to ensure their compliance with the Fund’s approach to good governance, including, for example, sound management structures, staff relations, staff compensation, and compliance with tax obligations.

Proportion of investments

The percentage of the financial product’s investments used to comply with the social characteristics promoted by the financial product is 25%.

Data sources and processing

To meet each of the social characteristics promoted by the financial product, data are provided by the various counterparties and the internal information systems of Gardant Investor SGR. In addition, specific official, publicly available databases such as ISTAT, European institute for Gender Equality and EUROSTAT are used as sources for the calculation of sector averages.

Limitations to methodologies and data

The data and information underlying the monitoring of social characteristics are subject to the availability of the counterparty.

Due diligence

Gardant Investor has incorporated ESG analysis into the Fund’s investment process. ESG Risk is assessed, both at Fund and individual investment level in both the pre-investment and monitoring phases, through a qualitative indicator determined on the basis of ESG due diligence whose objective is to identify, right from the portfolio acquisition phase, virtuous companies in relation to ESG criteria, through the assessment of specific KPIs. Furthermore, ESG due diligence is carried out with the aim of screening target companies on which to apply contractual clauses associated with the achievement of specific ESG target objectives. The preliminary screening allows the identification of the most virtuous companies, within the acquired portfolio, based on sustainability KPIs.

Engagement policies

One of the binding elements of Gardant Investor SGR’s investment strategy is the a priori exclusion from the investable universe of:

• companies operating in clear conflict with the principles codified by international standards and conventions (e.g., in violation of the United Nations Global Principles);
• companies operating in controversial sectors and activities, belonging to specific exclusion lists, by setting thresholds based on a company’s revenues during the previous four quarters. This negative ESG screening specifically relates to companies operating in controversial arms (any threshold), coal (threshold of 20% of each company’s revenues during the previous four quarters), conventional arms (30% of each company’s revenues during the previous four quarters), tobacco (20% of each company’s revenues during the previous four quarters), gambling (20% of each company’s revenues during the previous four quarters) and adult entertainment (any threshold);
• government issuers that are under the sanction’s regime of the United Nations, pursuant to Article 31 of the UN Charter.