Strategies for managing sustainability risks

Robus manages investment funds registered either as alternative investment funds (AIF) or as mutual funds (UCITS) in Luxembourg and is therefore required under Regulation (EU) 2019/2088 on the sustainability-related disclosures in the financial services sector (“SFDR”) to make disclosures on the Company’s website about how sustainability risks are taken into account when making investment decisions.

Sustainability risks (“ESG risks”) are environmental, social or corporate governance events or conditions, the occurrence of which may have a material adverse effect, actual or potential, on the assets, liabilities, financial position, profit or loss and reputation of the investments and may thereby affect their market value. In this context, Robus is aware that sustainability risks, if they occur, can have a negative impact on the return of investment and that this can have an impact on already known and anchored types of risk, such as market price risk, credit default risk, reputational risk or operational risk.

Robus has intensively addressed the topic of “sustainable investing” and has already been aligning its actions with an internal ESG policy since 2019. For example, various exclusion criteria have been defined, such as no investments in arms manufacturers or tobacco producers. A further consideration of sustainability risks within the framework of our investment decision-making processes is still under development.

Robus recognises that the pursuit of the funds’ objectives may have an adverse impact on sustainability factors in some circumstances. However, relevant data required to identify and weight adverse sustainability impacts is currently not available in sufficient quantity and quality in the mid-market debt market Robus invests in. Therefore, Robus is not in a position currently to consider adverse impacts of investment decisions on sustainability factors. Robus will review the data situation on a regular basis and then decide again on the possibility of taking into account adverse effects of investment decisions on sustainability factors as part of internal strategies.

Most of the Robus Funds have originally not been designed as ESG-focused products and Robus does not currently intend to disclose information on the material adverse impact of investment decisions on sustainability factors for the purposes of the SFDR. Robus’ primary focus is therefore on delivering attractive risk-adjusted returns. However, with the latest product in our performing credit strategy, the Robus Senior Debt Fund II, Robus established its first Article 8 Fund which does promote social and environmental characteristics.

In accordance with our remuneration policy, we may award fixed and variable remuneration to employees. Variable remuneration is awarded on a discretionary basis and takes into account the performance of the individual employee, the individual’s contribution to the performance of the Robus funds and the overall financial performance of Robus Capital Management. As we currently do not fully incorporate sustainability risks into the investment decision-making process, these will not have an impact on remuneration for the time being.