A DYNAMIC SCENARIO
The increasing attention to sustainability issues is changing the investment sector, redefining its objectives: creating value and contributing to the well-being of all, including future generations.
Investors are therefore also guided by ESG (Environmental, Social and Governance) factors in making their choices.
Kairos considers such factors crucial for a modern and efficient investment model, to pursue the goal of enhancing the assets of its clients, in a logic of continuity and capital preservation, while contributing, day after day, to the construction of a fairer world. In particular, within its range, it has decided to offer a product that, in accordance with the SFDR regulation, has a declared sustainability objective.
But what is a sustainable investment? An investment in an economic activity that contributes to an environmental or social objective, provided that such investment does not cause significant harm to any environmental or social objective, and the beneficiary company of the investments follows a good governance practice.
AN INNOVATIVE AND SUSTAINABLE SOLUTION
Kairos International Sicav ActivESG is Kairos’ solution based on an ESG long/short strategy with an asset allocation of at least 80% of gross exposure in sustainable investments, as provided for in Article 9 of Regulation (EU) 2019/2088.
It is an innovative product that distinguishes itself from the wide range of long-only ESG products and aims to reduce exposure to carbon emissions in order to achieve climate change mitigation, in line with the Paris Agreement. The management team aims to maximize the net reduction in the greenhouse gas intensity of the overall portfolio.
The investment process incorporates ESG parameters analysis and fundamental analysis in the selection of securities. The investable universe consists of all major European companies with medium and high capitalization, excluding ex-ante all non-sustainable investments. The investable universe is subject to exclusion criteria based on ESG filters.
companies belonging to certain sectors such as weapons, tobacco, predatory lending, thermal coal, those incompatible with the principles of the United Nations Global Compact (UNGC), and companies domiciled or listed in countries on the FATF lists (blacklist and grey list), the European list of high-risk countries, and countries subject to financial embargo.
companies with a severe level of controversy, according to Sustainalytics’ rating* scale
from 0 to 5
a controversy level of 5 is considered severe
companies with a maximum average ESG risk rating of 30, based on Sustainalytics’ evaluations* on a scale
from 0 to 100
an ESG risk higher than 30 is considered high
* Sustainalytics is a leading global and independent ESG rating agency, and Kairos relies on its support for ESG research.
Regarding Article 9, there are additional sectoral exclusions consistent with the objective of the fund in Kairos’ ESG policy. In line with the SFDR disclosure adopted by Kairos, additional exclusion criteria are applied in the selection process of the investment universe for the long portfolio:
Exclusions
Theshold
- Thermal coal
- >25% from electricity production
- Shale energy extraction
- >10%
- Tar sands extraction
- >10%
- Arctic oil and gas exploration
- >10%
- Nuclear energy production
- >10%
- Usury
- >0%
- Small arms
- >10%
More information is available at the link https://www.kairospartners.com/esg/informativa-sfdr/ and in the prospectus.
The management team has developed a proprietary internal model capable of analyzing various ESG parameters for each sector. Based on this model, the following will not be invested:
- in the long portfolio, companies with the worst ESG rating;
- in the short portfolio, companies with the best ESG rating.
Investment ideas are developed through fundamental analysis, based on conference calls, seminars, research, and institutional contacts that inspire the management team in selecting the securities that will form the long and short portfolio of KIS ActivESG. Each individual idea is tested to evaluate its alignment with the sustainable objective of the fund.
The investment portfolio is monitored annually to verify the achievement of the sustainable objective and the performance of the PAIs – the main negative effects on sustainability – which are instead monitored and analyzed on a quarterly basis.
The Fund is actively managed without reference to any benchmark.
KIS ActivESG therefore represents the response to the needs of a client base sensitive to ESG issues that, in addition, can rely on a non-traditional management methodology, of which Kairos is a pioneer. It is aimed at investors with a medium-high risk tolerance, who can set aside capital for a period of 3 to 5 years and who wish to satisfy defined investment objectives, have experience or understand so-called risk capital products and are willing to bear even significant capital losses (should they occur). Investment involves a risk component, and therefore the originally invested capital may not be fully or partially recovered. Past performance is not a guarantee of future results. KIS ActivESG’s synthetic risk indicator is classified at level 3 out of 7. Full information on risks is available in the Prospectus and KID.
A DEDICATED MANAGEMENT TEAM
Kairos has decided to entrust ActivESG to a management team composed of Riccardo Valeri, Portfolio Manager specialized in the European equity market, Marco Midulla, Co-Portfolio Manager, and Alberto Tocchio, Co-Portfolio Manager, both with extensive experience in the global equity market.
We are signatories of the PRI, Principles for Responsible Investment, the United Nations initiative which contributes to the development of an increasingly sustainable global financial system.
We are signatories of the Carbond Disclosure Project (CDP), the international non-profit organization that intends to contribute to the construction of a sustainable economy for people and the planet.