Our Sustainability Approach

An investment in an economic activity that contributes to an environmental objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economy, or an investment in an economic activity that contributes to a social objective, in particular an investment that contributes to tackling inequality or that fosters social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance, as defined in Article 2 of the 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.

Integration of ESG Criteria and Sustainability Risks

Sun Hill Investment Management considers environmental, social and governance (“ESG”) criteria as part of its overall investment analysis and risk assessment process because it believes this analysis is critical in order to have a complete understanding of the risk of each investment.

We define a sustainability risk as an ESG event or condition that, if it occurs, could cause a material impact on either the investment risk or return of our funds or portfolios.

ESG risks may impact the strategy of our funds and can have negative impacts on the overall performance of our funds, hence it is imperative for us to understand how these issues affect business strategy and performance. Impacts from these issues can be financial, material, and can spread across multiple funds and managed portfolios.

We adopted good governance practices, our Board composed of a mix between independent and non-independent directors, to limit bias which may otherwise lead to board approvals risks. Additionally, we have a social objective and adopted an inclusivity HR approach and appointed personnel with different nationalities and genders.

The offering documents of our funds include disclosures on the policies in place to integrate sustainability risk.

We do not follow a mechanistic, formulaic approach to determine which sustainability risks might be most material, but instead assesses those risks on an item-by-item and investment-by-investment basis taking into account available information and data. As such, Sun Hill Investment Management considers sustainability risks to varying extent depending on factors such as the availability and type of ESG data, the investment horizon and the characteristics of the investment.

Whilst Sun Hill Investment Management engages in the assessment of ESG criteria as described above, it does not have formal quantifiable targets or hurdles for all of its funds and portfolios under management.

Our Products Meeting Sustainability Criteria

The products listed below have adopted sustainability measures and policies

Budapest Apartments Real Estate Fund

Regulated Alternative Investment Fund

This Fund invests in residential and commercial apartments in the Budapest Metropolitan Region. The Fund aims to invest substantial part of its portfolio in near zero emission real estate. Further, the Fund aims to upgrade the energy efficiency of its holdings where they are rated in a below average category by the relevant scales.

While the Fund aims to upgrade the energy efficiency of its holdings where they are rated in a below average category, given certain restrictions, in particular regarding buildings under historical protection, such improvements may not always be possible.

The current investment portfolio of the Fund comprises the following categories of real estate investments:
100% near zero emission rating
0% other above average energy efficiency rating
0% below average energy efficiency rating

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Other Investment Products

Investment products that currently do not meet sustainability criteria

West Bridge Fund

Notified Alternative Investment Fund

This Fund primarily invests in income producing private debt securities.

The Fund will allocate its exposure taking into account credit risk, subordination and maturity. 80% of the portfolio shall have time to maturity not exceeding 3 years.

The Investment Manager will monitor the issuer profile of the portfolio assets in respect of their sustainability policies, however, no formal commitment has been made in that regard as of now.

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