SFDR Entity-Level Disclosure Statement
1. Introduction
Sustainability Risk Policy and Principal Adverse Impact Statement
Titanbay Ireland Limited (the “Company”) is an alternative investment fund manager (“AIFM”) authorised and regulated by the Central Bank of Ireland pursuant to the European Union (Alternative Investment Fund Managers) Regulations 2013 (as amended) (the “AIFM Regulations”), including both Regulation 7(4)(a) and Regulation 7(4)(b)(iii) of the AIFM Regulations.
The Company is authorised to manage and distribute Luxembourg-domiciled alternative investment funds, including Reserved Alternative Investment Funds (“RAIFs”) and, in the future, may manage and distribute other fund vehicles such as undertakings for collective investment governed by Part II of the Luxembourg Law of 17 December 2010 on undertakings for collective investment (“UCI Part II Funds”). The Company is also authorised for MiFID Top-Up activities, notably Receipt and Transmission of Orders and Individual Portfolio Management.
As per Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector, as amended (“SFDR”), the Company is defined as a “financial market participant” in respect of both its AIFM activities and its Individual Portfolio Management activities.
This Statement sets out the Company's entity-level disclosures required under Articles 3 and 4 of SFDR. Information on how the Company's remuneration policies are consistent with the integration of sustainability risks, as required by Article 5 of SFDR, is set out in the Company's Remuneration Policy, which is published separately on the Company's website.
2. Sustainability Risk Policy
2.1 Definition
For the purpose of this Statement, “sustainability risk” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment. Examples include widespread flooding across parts of the UK or high workforce turnover as a result of poor employment practices.
This Statement has been established pursuant to Article 3 of SFDR and Commission Delegated Regulation (EU) 2021/1255 (“CDR 2021/1255”), which requires financial market participants to publish information about their policies on the integration of sustainability risks in their investment decision-making process.
2.2 Integration of Sustainability Risks into Investment Decision-Making
The Company has established, implemented and maintains this Sustainability Risk Policy in a manner proportionate to the nature, scale and complexity of its activities and consistent with the risk profiles of the financial products it manages.
The Company integrates sustainability risks into its investment decision-making process at all relevant stages, including:
- (a) Investment due diligence: The Company considers sustainability risks when researching potential investments. This includes reviewing a target fund investment's ESG policies, processes and governance practices, enabling the Company to identify investment opportunities consistent with its investment policy and with strong potential for long-term financial performance.
- (b) Investment selection: The Company selects investments in target fund investments based on a holistic assessment of both financial and sustainability factors, and assesses the potential impact of sustainability risks on expected returns.
The Company has the option to leverage external specialists and/or partners to perform enhanced ESG due diligence on prospective target funds. The Company has enhanced its existing risk management frameworks to account for the integration of sustainability risks into investment decision-making.
The Company ensures that disclosures made in pre-contractual documents are consistent with the investment objectives of the financial products it manages.
2.3 Governance
The Designated Person for Investment Management is responsible for ensuring all investments are in line with the Company's sustainability obligations. The Chief Risk Officer is responsible for reviewing this Statement.
3. Principal Adverse Impact Statement
3.1 Entity-Level Position
In accordance with Article 4(1)(b) of SFDR, the Company does not currently consider principal adverse impacts (“PAIs”) of investment decisions on sustainability factors at entity level. The Company has fewer than 500 employees and is therefore not subject to the mandatory PAI consideration obligation under Article 4(3) of SFDR. This Statement applies solely to the Company's entity-level assessment and reporting obligations under SFDR.
3.2 Reasons for Not Considering Principal Adverse Impacts at Entity Level
The Company has determined that it is not appropriate, at this time, to consider PAIs at entity level for the following reasons:
- (a) The legal and technical requirements for identifying, measuring, aggregating, weighting and mitigating PAI indicators under Commission Delegated Regulation (EU) 2022/1288 are complex, prescriptive and continue to evolve.
- (b) The availability, quality and comparability of the data required to assess PAIs, particularly in the context of private markets and private equity fund investments, remain limited.
- (c) In many cases, the relevant data may be incomplete, estimated, based on assumptions, or otherwise not sufficiently reliable to support a robust and consistent entity-level assessment.
- (d) Given the nature of the Company's investment activities, including investments made through underlying funds managed by third-party managers, the Company does not currently have direct and consistent access to the data required to perform meaningful entity-level PAI calculations.
Accordingly, the Company considers that an entity-level assessment of PAIs would not, at present, provide an accurate or reliable representation of sustainability impacts.
3.3 Product-Level Consideration of Principal Adverse Impacts
The Company's decision not to consider PAIs at entity level does not preclude certain financial products managed by the Company from considering PAIs at product level.
Where a financial product considers PAIs on sustainability factors, this is disclosed at product level in accordance with Article 7 of SFDR and the applicable regulatory technical standards, including in pre-contractual and website disclosures.
3.4 EU Taxonomy
At entity level, the Company does not take into account the EU criteria for environmentally sustainable economic activities as set out in Regulation (EU) 2020/852 (the “Taxonomy Regulation”) for the purposes of assessing PAIs.
Any information relating to Taxonomy alignment, or the lack thereof, is disclosed at product level where required.
4. Remuneration Policy (Article 5, SFDR)
Information on how the Company's remuneration policies are consistent with the integration of sustainability risks, as required by Article 5 of SFDR, is set out in the Company's Remuneration Policy, which is published on the Company's website.
5. Review and Future Consideration
This Statement is subject to at least annual review and approval by the Board of Directors. The Company will continue to monitor regulatory developments, supervisory guidance, data availability and market practices.
The Company will reassess its position on the consideration of PAIs at entity level if and when it considers that the necessary data, methodologies and regulatory clarity are sufficiently developed to support a robust and proportionate assessment.
6. Further Information
For further information regarding this Statement, please contact compliance@titanbay.ie.