Sustainability Risk Policy

Scope

Ardabelle Capital acts as a financial market participant providing portfolio management services (management of Alternative Investment Funds). In accordance with Article 3 of the SFDR, the present disclosure describes how sustainability risks are integrated into its activities.

A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could have an actual or potential material negative impact on the value of an investment.

Integration of Sustainability Risks in Investment Decision-Making

As a manager of Alternative Investment Funds focused on Private Equity, Ardabelle Capital integrates sustainability risks throughout its investment decision-making process. This integration takes place at each stage of the investment lifecycle:

Pre-investment Screening and Due Diligence

Ardabelle Capital applies an exclusion policy to screen out investments presenting unacceptable sustainability risks, covering notably controversial weapons, thermal coal, sanctioned jurisdictions and companies in serious violation of the UN Global Compact or OECD Guidelines. All potential investments undergo ESG due diligence assessing environmental, social and governance risks alongside traditional financial analysis. A determination that there are material adverse sustainability risks that cannot be mitigated will result in a decision not to invest. The investment may proceed if Ardabelle Capital is confident that the risks are at an acceptable level and can be managed during the holding period.

Investment Committee Review

ESG findings form an integral part of the investment materials submitted to the Investment Committee. Sustainability risks are assessed alongside all other relevant factors. ESG is a standing agenda item in all Investment Committee discussions.

Monitoring During the Holding Period

Once an investment is made, Ardabelle Capital monitors sustainability risks on a regular basis through ongoing controversy monitoring, annual ESG reporting by portfolio companies, and periodic review of sustainability KPIs and roadmaps established at acquisition. Where the level of risk is deemed significant, a commitment strategy or support plan may be implemented to reduce net risk exposure.

Consistency with Remuneration Policy

Ardabelle Capital's remuneration policy is designed to promote sound and effective risk management and does not encourage risk-taking incompatible with the prospectuses, articles of association, or other constitutional documents of the AIFs managed by Ardabelle Capital. Employee remuneration comprises a fixed salary, which reflects professional experience and role requirements, and a variable component determined based on both quantitative and qualitative criteria.

In accordance with Article 5 of the Sustainable Financial Disclosure Regulation (EU) 2019/2088, Ardabelle Capital discloses how its remuneration policy is consistent with the integration of sustainability risks. The firm's carried interest structure directly integrates sustainability performance: a sizeable share of carried interest available for compensation is contingent upon portfolio companies achieving their defined impact KPIs. This structure ensures that the investment team's financial incentives are fundamentally aligned with the delivery of measurable sustainability outcomes and demonstrates the management team's conviction that the integration of sustainability into diligence and value creation generates material outperformance.

Further Information

The complete Sustainability Risk Management Policy, including detailed descriptions of the ESG analysis methodology, risk identification and assessment framework, principal adverse impact indicators, and internal control procedures, is available to investors in the pre-contractual documentation of Ardabelle Capital's funds.

Last updated: April 2025