EU Sustainable Finance Disclosure Regulation

Information required under the EU Sustainable Finance Disclosure Regulation (“SFDR”)

Integration of sustainability risks in investment decisions

The consideration of environmental, social and governance (“ESG”) factors is integrated into Comvest Credit Advisors (Luxembourg) LLC’s (“CCA Lux”) investment processes. ESG considerations are primarily the responsibility of the specific investment team evaluating an investment, along with the other risks identified during the due diligence process. In addition to the exclusionary criteria and proprietary scoring methodology discussed below under “No consideration of sustainability adverse impacts,” on every transaction in which an affiliate of CCA Lux serves as the lead arranger, a third party ESG consultant is engaged to conduct asset specific ESG due diligence. The goal of these analyses is to obtain an objective, third-party perspective on each opportunity’s ESG merits and risks including, in certain instances, sustainability risks, to determine (in totality with the results of other due diligence and underwriting work streams), ultimately by the CCA Lux investment committee, the opportunity’s suitability for inclusion within CCA Lux’s direct lending portfolio. CCA Lux does not currently, however, weigh in its investment decisions whether ESG factors, standing alone, would be reasonably likely to have a material negative impact on the creditworthiness of an investment.

No consideration of sustainability adverse impacts

CCA Lux is required to publish information on whether it considers the “adverse impacts of investment decisions on sustainability factors” (the “PAIs”) under SFDR in connection with the alternative investment funds for which it serves as investment manager. CCA Lux does not currently consider PAIs of investment decisions on sustainability factors in connection with these funds (or any other product or service). This is because CCA Lux is not, in its view, currently in a position to obtain and/or measure all the data which would be required by SFDR to report on PAIs, or to do so consistently and at a reasonable cost as the vast majority of underlying investments are in North American companies that are not required to, and most do not currently, report by reference to the same data.

Where it has sufficient access to data, CCA Lux may in the future consider and report to investors, on a voluntary basis, applying the same standards as in SFDR, the principal adverse impacts of investment decisions on sustainability factors.

With respect to the alternative investment funds for which CCA Lux serves as investment manager, CCA Lux has applied established ESG-related standards, implemented by way of exclusionary criteria and a proprietary scoring methodology, which is broadly meant to ensure potential investments align themselves with the UN Global Compact Principles and OECD Guidelines for Multinational Enterprises. CCP Lux’s exclusionary criteria may be accessed by clicking here. ɫis a signatory to the United Nations-backed Principles for Responsible Investment.

Information on how remuneration policies are consistent with the integration of sustainability risks

In practice, in accordance with general private equity and private credit remuneration and compensation processes, a significant portion of the compensation of the investment professionals affiliated with CCA Lux is generally remitted later in the life of an alternative investment fund and based on the ultimate performance of the fund’s underlying investments, meaning that the value of an investment professional’s compensation will be negatively impacted by a sustainability risk that impacts the value of the underlying investment.

Date of publication: September 2023.