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 established and promoted by Gardant Investor SGR.

An innovative solution that 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 200/300 million Euros.

 

Sustainability-related disclosures

a) Summary

The Fund Terre Agricole Italiane is classified as a financial product that, according to Article 8 of Regulation (EU) 2019/2088 (also known as “SFDR”), promotes both environmental and social characteristics.

In line with the most recent European regulations, Gardant Investor SGR adopts activities and processes to ensure the correct implementation of the legislation. This process involves integrating ESG criteria into its processes and behaviors. Gardant Investor SGR aims to monitor and manage the risks associated with sustainability factors that investments may pose to investors and counterparts. The Company also commits to transparently communicate its approach to integrating sustainability factors into investments, especially concerning the evaluation and management of ESG risks, through channels specified by current regulations.
Within the risk management system, sustainability risk management related to the Fund’s investments focuses on identifying, assessing, and monitoring parameters related to environmental and social characteristics promoted by the product through a proprietary tool.
In general, regarding investment decisions, technical, environmental, and legal due diligence is conducted by professional entities. Additionally, these analyses are considered by the Risk Management function. Environmental and social risk factors are understood as events or environmental, social, or governance conditions that, in case of occurrence, could cause a material actual or potential negative impact on the value of an investment and, therefore, on the Fund. No benchmark has been identified that meets the environmental or social characteristics promoted by the Fund.
Specifically, the environmental characteristics promoted by the Fund Terre Agricole Italiane include:

• Supporting the use of organic, regenerative, and conservation agriculture techniques;
• Limiting chemical contamination of soil, groundwater, and air by reducing the use of chemical fertilizers and pesticides;
• Promoting organic farming and limiting the use of artificial fertilizers, herbicides, and pesticides;
• Encouraging crop rotation to stimulate greater landscape and ecological variability, reducing the persistence of ecosystem disservices such as pest outbreaks;
• Reducing greenhouse gas emissions from the agricultural sector by promoting the use and production of energy from renewable sources;
• Supporting the modernization of the agricultural sector through the use of agriculture 4.0 techniques and technologies to reduce emissions from agricultural vehicles, the use of pesticides, and water consumption;
• Promoting the use of precision farming technologies that allow for the reduction of natural resource consumption and the increase in the quality and quantity of production.

The Fund Terre Agricole Italiane promotes the environmental objective listed in Article 9(f) of Regulation (EU) 2020/852, “protection and restoration of biodiversity and ecosystems,” but it does not make sustainable investments that consider 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 characteristics promoted by the product include:

• Increasing employment, especially of young farmers;
• Facilitating agricultural entrepreneurship, particularly among the youth;
• Increasing the presence of young and/or female employees in the agricultural sector;
• Promoting the participation of agricultural operators, even in rural areas;
• Promoting knowledge transfer and innovation in the agricultural sector, including in rural areas;
• Strengthening agricultural income and stimulating competitiveness.

Specific clauses will be included in the lease contracts to monitor the above-mentioned environmental and social characteristics. Indicators of sustainability used to measure the environmental or social characteristics promoted by the product are:

• Hectares of land subject to crop rotation;
• Percentage of assets allocated to projects of organic and/or regenerative and/or conservation agriculture out of the total allocated assets;
• Percentage of assets allocated to agricultural projects using precision farming techniques out of the total allocated assets;
• Percentage of assets allocated to agricultural enterprises with environmental certifications out of the total allocated assets;
• Percentage of assets allocated for the modernization of agricultural techniques and tools out of the total allocated assets;
• Number of farmers under the age of 41 with experience receiving aid for first settlement in a farm as the head of the farm;
• Number of farmers under the age of 35 with a degree receiving aid to start their own entrepreneurial initiative in agriculture;
• Number of agricultural businesses organized as sole proprietorships or companies, composed of young people aged between 18 and under 41 or women;
• Number of farmers who have benefited from training/information actions;
• Number of farmers under the age of 41 hired;
• Percentage of assets allocated to increase profitability per hectare of cultivated land out of the total allocated assets;
• Percentage of assets allocated to agricultural projects in rural areas and/or subject to natural constraints out of the total allocated assets;
• Number of farmers operating in rural areas who have benefited from training/information actions.

b) No sustainable investment objective

This financial product promotes environmental and social characteristics but does not have sustainable investment as its objective.

c) Environmental or social characteristics of the financial product

The environmental characteristics promoted by the Terre Agricole Italiane Fund include:

• Supporting the use of organic, regenerative, and conservation agriculture techniques.
• Limiting chemical contamination of the soil, groundwater, and air by reducing the use of chemical fertilizers and pesticides.
• Promoting organic farming and limiting the use of artificial fertilizers, herbicides, and pesticides.
• Encouraging crop rotation to stimulate greater landscape and ecological variability, reducing the persistence of ecosystem disservices such as pest outbreaks.
• Reducing greenhouse gas emissions from the agricultural sector by promoting the use and production of energy from renewable sources.
• Supporting the modernization of the agricultural sector through the use of 4.0 agriculture techniques and technologies to reduce emissions from agricultural machinery, pesticide use, and water consumption.
• Promoting the use of precision farming technologies that enable the reduction of natural resource consumption and increase the quality and quantity of productions.

The social characteristics promoted by the product include:

• Increasing employment, especially for young farmers.
• Facilitating agricultural entrepreneurship, particularly among the youth.
• Increasing the presence of young and/or female employees in the agricultural sector.
• Encouraging the participation of agricultural operators, even in rural areas.
• Promoting knowledge transfer and innovation in the agricultural sector, including in rural areas.
• Strengthening agricultural income and stimulating competitiveness.

d) Investment strategy

The main purpose of the Fund will be to invest in the acquisition of land intended for any cultivation or agricultural activity, primarily located in Italy and other EU Member States. These lands will then be leased/managed by agricultural enterprises with characteristics specifically listed in Article 8 of the Fund’s management regulations, providing that a portion of these lands will be leased/managed by the category of young farmers. Additionally, the Fund will adopt an investment policy to promote the environmental and social characteristics mentioned above.
As described in the Group’s ESG Policy and the Company’s Responsible Investment Procedure o (available on the website), Gardant Investor SGR commits, where applicable, to integrate ESG factors into investment decisions, also assessing good governance practices in its exclusion policy. To achieve this, the Company conducts ESG due diligence/screening during the investment phase, requesting for each investment a documentation set that includes information regarding its governance and assigns it an ESG score using a proprietary tool that adheres to certain minimum thresholds.

e) Proportion of investments

The percentage of financial product investments used to meet the environmental or social characteristics promoted by the financial product is 66%.

f) Monitoring of environmental or social characteristics

Specific clauses will be included in the lease agreements to allow monitoring of the environmental and social characteristics. Through a proprietary ESG Tool, parameters connected to the environmental and social characteristics promoted by the product are identified, assessed, and monitored. More generally, with reference to investment decisions, the completion of ESG due diligence/screening is envisaged.

g) Methodologies

For the identification of social and environmental characteristics, the Fund has adopted an internal methodology with the aim of not causing significant harm to any other factor and in compliance with the principle of good governance. Specifically, the sustainability indicators used to measure the environmental or social characteristics promoted by the product are:

• Hectares of land subject to agricultural rotation;
• Percentage of assets allocated to projects of organic and/or regenerative and/or conservative agriculture on the total allocated assets;
• Percentage of assets allocated to agricultural projects using precision farming techniques on the total allocated assets;
• Percentage of assets allocated to agricultural enterprises with environmental certifications on the total allocated assets;
• Percentage of assets allocated for the modernization of agricultural techniques and tools on the total allocated assets;
• Number of farmers under 41 years old receiving aid for the first settlement in a farm as head of the farm;
• Number of farmers under 35 years old receiving aid to start their own entrepreneurial initiative in agriculture;
• Number of agricultural businesses organized as sole proprietorships or companies, composed of young people aged between 18 and 41 or women;
• Number of farmers who have benefited from training/information actions;
• Number of farmers under 41 years old hired;
• Percentage of assets allocated to increase profitability per hectare of cultivated land on the total allocated assets;
• Percentage of assets allocated to agricultural projects in rural areas and/or subject to natural constraints on the total allocated assets;
• Number of farmers operating in rural areas who have benefited from training/information actions.

h) Data sources and processing

To meet each of the environmental or social characteristics promoted by the financial product, data is provided by various counterparties and Gardant Investor SGR’s internal information systems. The data feeds into the proprietary Tool, which allows for the identification, evaluation, and monitoring of parameters related to the social and environmental characteristics promoted by the product and ensures their quality. Gardant has also established a data control process on the information obtained from counterparties, through a verification, validation, and completeness check procedure. Whenever counterparties use estimates in quantifying the data provided to Gardant Investor SGR, evidence of the estimation process will be required.

i) Limitation of methodologies and data

The data and information that feed into the proprietary monitoring Tool for environmental and social characteristics are subject to counterpart availability. This limitation in the potential retrieval of data does not affect how the characteristics promoted by the Fund are satisfied.

j)Due Diligence

Regarding investment decisions, technical, environmental, and legal due diligence is carried out. Counterparties are required to provide a set of documents/evidence to assign an ESG score using a proprietary tool that allows for an initial screening. Additionally, these analyses are also considered by the Risk Management Function. Gardant Investor SGR will perform a consistency check of the Due Diligence with respect to the sustainability strategy of the Fund.

k) 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 stark contrast to principles codified by international norms and conventions (for example, in violation of the United Nations Global Principles);
• Companies operating in controversial sectors and activities belonging to specific exclusion lists, setting thresholds based on a company’s revenues over the previous four quarters. This negative ESG screening specifically refers to companies operating in controversial sectors such as controversial arms (any threshold), coal (threshold of 20% of each company’s revenues over the previous four quarters), conventional weapons (30% of each company’s revenues over the previous four quarters), tobacco (20% of each company’s revenues over the previous four quarters), gambling (20% of each company’s revenues over the previous four quarters), and adult entertainment (any threshold);
• Government issuers under the United Nations sanctions regime, pursuant to Article 31 of the United Nations Charter. Additionally, the allocated assets will always be aimed at ensuring that each investment adopts water efficiency practices (e.g., reducing consumption and adopting new techniques) and optimization of resources used for agricultural production (e.g., reducing waste and the use of chemical fertilizers and pesticides).

As described in Gardant S.p.A’s “ESG Policy,” the Group aims to position itself as one of the most active operators in integrating and promoting environmental, social, and governance (ESG) issues in its business model and activities. The Group’s goal is to offer its clients the solidity and sustainability of a specialized and responsible business through both evolving consolidated tools and the expertise of its people. These objectives are pursued through:

 

• Adherence to international initiatives such as the UN Global Compact;
• Monitoring the sustainability impacts generated by relevant business activities;
• A responsible approach in credit management and protection;
• Transparency towards stakeholders ensured through periodic reporting of sustainability performance.

l) Designated reference benchmark

No benchmark index has been identified that satisfies the environmental or social characteristics promoted by the Fund.

Gardant Re-Credit è il FIA mobiliare e di credito di tipo riservato promosso da Gardant Investor SGR.

Gardant Re-Credit ha un focus su investimenti in crediti e single name UTP «secured» assistiti da garanzie immobiliari; e, in maniera ridotta, acquisizione e valorizzazione di progetti real estate distressed, nonché, erogazione di crediti single name con la presenza di garanzie immobiliari.

La strategia di investimento di Gardant Re-Credit persegue un impatto positivo diretto sull’economia reale, andando ad incidere direttamente sulle aziende con le quali si avviano processi di ristrutturazione, curando il rispetto dei seguenti principi ESG monitorabili (Art. 8):

1. Uguaglianza nel trattamento dei dipendenti, equo sistema di retribuzione e pari opportunità per tutti i dipendenti a prescindere dal genere ed età anagrafica;
2. Sviluppo, valorizzazione e aggiornamento delle competenze professionali tramite piani di formazione per tutte le categorie di dipendenti;
3. Salute e la sicurezza dei lavoratori

Inoltre, tutte le strategie di gestione del credito perseguono l’obiettivo di permettere al debitore di tornare a svolgere un ruolo economicamente attivo nella comunità e di rilanciare le imprese che vivono momenti di difficoltà. I suddetti accordi tra le parti prevedono la modifica delle condizioni contrattuali a favore del debitore a condizione che vengano da quest’ultimo raggiunti specifici target ESG, concordati tra le parti e vincolanti per le stesse. Oltre agli obiettivi «diretti» in linea con la qualifica di articolo 8, il Fondo agirà sempre con l’obiettivo di risanare ed efficientare gli immobili oggetto di garanzia dei propri crediti

Il Fondo ha un target di raccolta di 200 milioni di euro.

 

Sustainability-related disclosures

a) Summary

The Gardant RE-Credit Fund (the “Fund”) is classified as a financial product that, under Article 8 of Regulation (EU) 2019/2088 (also known as “SFDR”), promotes social characteristics in line with the most relevant international standards. In particular, the Fund aims to ensure economic and social rights, respect for human rights in business activities and relationships, and to promote sustainable and inclusive economic growth, along with productive and dignified employment.
Specifically, the social characteristics promoted by the product include:

• equality in employee treatment, a fair compensation system, and equal opportunities for all employees regardless of gender and age. This ensures that the level of remuneration by gender and the composition of the personnel are at least equal to the debtor’s company industry average and such to progressively reduce any identified gap.
• development, enhancement, and updating of professional skills through training plans for all categories of employees. The goal is to ensure equal growth opportunities, facilitate skill acquisition and lifelong learning, with an average of training hours delivered at least equal to the debtor’s company industry average, and a progressive increase in this average.
• health and safety of workers, ensuring an injury rate lower than the debtor’s company industry average.

To pursue these social characteristics, the Fund promotes the definition of restructuring or debt recovery plans for indebted companies and out-of-court agreements that focus on the social characteristics promoted by the Fund. Moreover, all credit management strategies aim to enable the debtor to re-obtain an economically active role in the community. The agreements between the parties involve modifying contractual conditions in favor of the debtor, provided the debtor achieves specific ESG targets agreed upon and binding for both parties. The qualitative and quantitative targets of the agreements may relate to the level of health and safety at work, gender pay gap, support for equality and inclusion, and qualifying training.

b) No sustainable investment objective

This financial product promotes social characteristics, but its objective does not include sustainable investment.

c) Environmental or social characteristics of the financial product
The social characteristics promoted by the RE-Credit Fund include:

• equality in employee treatment, fair compensation systems, and equal opportunities for all employees, ensuring that gender-based pay and workforce composition are at least industry average and progressively reducing any identified gaps.
• development, enhancement, and updating of professional skills through training plans for all employee categories, ensuring equal growth opportunities and facilitating skill acquisition and lifelong learning.
• worker’s health and safety, ensuring an injury rate below the debtor’s company industry average

d) Investment strategy

d) Investment strategy
The Fund invests its assets in: (A) credits, mainly in good standing or classified as “unlikely-to-pay,” and, residually, belonging to other categories of deteriorated credits; (B) medium and long-term financing provided by the Company; (C) real estate subject to guarantees related to the assets referred to in letters (A) and (B) above; (D) movable instruments of any nature conferring economic rights related to the assets under (A), (B), and (C), and/or to the entities to which these assets refer. The Company has integrated ESG analysis into the Fund’s investment process. ESG risk is assessed at both Fund and individual investment levels, in both the pre-investment and monitoring phases, through a qualitative indicator determined based on the following elements:

• Two ESG Due Diligence processes aimed at identifying, 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 achieving the Fund’s target objectives.

Sustainability risk analysis has also been incorporated into the investment process through the involvement of the Risk Management function, which, within its framework, considers sustainability risks. Both during the due diligence phase and after the investment, the governance policies and practices of the target company are assessed to ensure compliance with the Fund’s governance approach, including, for example, robust management structures, employee relations, staff remuneration, and compliance with tax obligations.

e) Proportion of investments

The percentage of financial product investments used to meet the promoted social characteristics is 25%.

f) Monitoring of environmental or social characteristics

In the contracts negotiated out of court and in restructuring contracts negotiated with the counterparty, specific clauses foreseeing the modification of contractual conditions in favor of the debtor will be included, on condition that specific ESG targets are achieved. These targets are agreed upon the parties, binding for them, and verified through periodic monitoring. The quantitative and qualitative targets of the agreements may concern the level of health and safety at work, gender pay gap, support for equality and inclusion, and training. Additionally, specific sustainability indicators have been identified for monitoring the social characteristics promoted by the Fund.

g) Methodologies

The sustainability indicators used to measure the social characteristics promoted by the product are:

• Average ratio between the total annual compensation of the highest-paid individual and the total median annual compensation of all employees (excluding the highest-paid individual);
• Annual decrease in the percentage difference in gender pay gap among debtor companies;
• Annual decrease in the ratio between the basic salary and the compensation of women compared to men for each category of employees, for significant debtor companies’ business locations;
• Percentage of individuals within the organization’s governance bodies belonging to the following diversity categories:
  • Gender;
  • Age group (<30 years, >30<50 years, >50 years);
  • Other relevant diversity indicators (such as minorities or vulnerable categories).
• Percentage of employees by categories belonging to the following diversity categories:
  • Gender;
  • Age group (<30 years, >30<50 years, >50 years);
  • Other relevant diversity indicators (such as minorities or vulnerable categories).
• Increase in the average annual number of hours of training received by employees, broken down by:
  • Gender;
  • Age;
  • Employee category.
• Number and rate of workplace injuries for all employees;
• Number of occupational diseases for all employees;
• Average number of hours of qualified and specialized training provided to workers, including both general training and specific training on professional hazards, activities, or hazardous situations.

h) Data sources and processing

To meet each of the environmental or social characteristics promoted by the financial product, data is provided both by various counterparties and internal information systems of Gardant Investor SGR. Additionally, specific publicly available official databases, such as ISTAT, the European Institute for Gender Equality, and EUROSTAT, are used as sources to calculate sector averages. Extracting data directly from these official databases ensures the quality of the data a priori. The data requested from target companies align with GRI standards or the Principle Adverse Impacts (PAI) outlined in Regulation 2019/2088. As for the quality of this data, it will be ensured through a system of controls. The initial check involves validating and ensuring completeness of the information obtained from target companies. The responsibility for the reliability of the data lies with the target companies providing the data. In cases where Gardant Investor SGR processes this data for aggregations or weightings, Gardant itself will ensure data quality through an internal control process aimed at ensuring the integrity of the data. Whenever target companies use estimates in quantifying the data provided to Gardant Investor SGR, evidence of the estimation process will be requested.

i) Limitation of methodologies and data

The data and information underlying the monitoring of social characteristics are subject to the availability of the counterparty. This limitation in the potential retrieval of data does not affect how the social characteristics promoted by the Fund are met.

j) Due diligence

The Company has integrated ESG analysis into the investment process of the Fund. ESG Risk is assessed at both the Fund and individual investment levels, both in the pre-investment and monitoring phase, using a qualitative indicator based on ESG due diligence. The aim of the ESG due diligence is to identify, from the portfolio acquisition phase onwards, virtuous companies in relation to ESG criteria, through the evaluation of specific Key Performance Indicators (KPIs). The ESG due diligence is also conducted with the objective of screening target companies on which to apply contractual clauses associated with achieving specific ESG target objectives. The preliminary screening allows for the identification of the most virtuous companies within the acquired portfolio based on sustainability KPIs. Gardant Investor SGR will conduct a consistency check of the Due Diligence with respect to the sustainability strategy of the Fund.

k) Engagement policies

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

• Companies operating in clear contrast to principles codified by international norms and conventions (e.g., in violation of the United Nations Global Principles);
• Companies operating in controversial sectors and activities belonging to specific exclusion lists, setting thresholds based on a company’s revenues over the previous four quarters. This negative ESG screening specifically refers to companies operating in the sector of controversial weapons (any threshold), coal (threshold of 20% of each company’s revenues over the previous four quarters), conventional weapons (30% of each company’s revenues over the previous four quarters), tobacco (20% of each company’s revenues over the previous four quarters), gambling (20% of each company’s revenues over the previous four quarters), and adult entertainment (any threshold);
• Government issuers under the United Nations sanctions regime, pursuant to Article 31 of the United Nations Charter.

Another binding element of the investment strategy is the ESG Due Diligence, carried out prior to the stipulation of the out-of-court agreement, in order to define sustainability Key Performance Indicators (KPIs) that will be included as contractual constraints. This allows the out-of-court agreement to be tailored based on the characteristics of the counterparty.

l) Designated reference benchmark

No benchmark index meeting the Fund’s promoted social characteristics has been identified.