KAIROS VENTURES ESG ONE

KAIROS VENTURES ESG ONE

Kairos Ventures ESG One is an Italian Alternative reserved closed-end Investment Fund, reserved for capital calls and direct distribution. It is the first Kairos venture capital and one of the first VC funds on the Italian market that promotes the principles of sustainability, consistent with the company’s strategy and philosophy.

It invests in start-ups and innovative SMEs mainly Italian – early and late stage – covering four sectors.

The portfolio is widely diversified with the aim of maximizing returns and minimizing the level of risk. The duration of the Fund is 10 years.


Recording date November 2021

Identity card

  • Category

    Italian Alternative Investment Fund (AIFs) securities closed

  • Management style

    Active management style, intended as the ability to select investment opportunities thanks to the deep experience of the management team in the world of tech start-ups

  • Investment universe

    Invests in Italian start-ups and innovative SMEs – early and late stage – at least for 70% of the total value in the fast growing sectors such as:

    • B2B Digital Transformation (including blockchain, 5G, big data, Internet of Things, AI);
    • Life Science (diagnostics, medtech, animal health);
    • New Space Economy (services and technologies for nano and microsatellites);
    • Green Energy Technology (clean energy technologies and energy transition, smart cities).
  • Objective

    The increase in the value of assets through medium-long-term investment transactions

  • ESG Approach
    The Sub-Fund promotes environmental and social characteristics and partially invest in sustainable investments and, therefore, is subject to the disclosure obligation pursuant to art. 8 of Regulation (EU) 2019/2088. Further information is available at https://www.kairospartners.com/esg-en/sfdr-information/?lang=en and in the prospectus.
  • Level of risk
    • 1
    • 2
    • 3
    • 4
    • 5
    • 6
    • 7

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SUSTAINABILITY DISCLOSURE

Sustainability-related disclosures

SUSTAINABILITY DISCLOSURE

Sustainability-related disclosures

  1. Summary

    Kairos Partners SGR (hereafter the “SGR”) is aware that the importance of ESG issues and has integrated dedicated processes for analyzing and monitoring ESG parameters.

    The investment policy of the Italian law closed-end fund called Kairos Ventures ESG One (hereinafter the “Fund”) focuses on companies in the early stages of life operating in sectors and markets characterized by the technological and commercial challenges resulting from the post-pandemic Covid-19 recovery, that are: (i) healthcare and health technologies; (ii) digitalization, software, internet of things and artificial intelligence and cyber security; (iii) new space economy; (iv) green revolution, sustainability and ecological transition.

    The target companies of the Fund, namely high-tech startups and the reference sectors indicated above, make the Fund’s strategy aligned with some of the Sustainable Development Goals (SDGs). The financial product promotes environmental or social features but does not have sustainable investment as its objective.

    In order to promote the environmental or social features of the Fund, an analysis on the ESG topics of the Fund’s target companies is carried out within the investment and process and the ESG activity is expected to be monitored. The SGR uses both internal dedicated expertise and external consultants, specialized in ESG, as a source of relevant data and information on the management of ESG processes. A specific reference index for the Fund for the pursuit of environmental and social features has not been designated.

    Download the summary 01.01.2023

  2. No sustainable investment objective

    This financial product promotes environmental or social features but does not have sustainable investment as its objective.

  3. Environmental or social features of the financial product

    Kairos Partners SGR, the management company of the closed-end fund called Kairos Ventures ESG One, is aware that ESG (environmental, social, governance) themes are becoming increasingly important in today’s world and constitute both a threat and an opportunity for the global economy. The effort to reduce the risks associated with these factors has stimulated the search for innovative solutions in all fields and is expected to lead to substantial economic growth in the medium to long term.

    In this context, the SGR has integrated dedicated processes for the analysis and monitoring of ESG parameters, allowing it to promote and increase value creation in the medium to long term.

    The SGR has equipped itself with: i) a Responsible Investment management policy; ii) an investment procedure for the Fund that takes into account ESG aspects (as indicated in section 4) and iii) internal tools developed to analyze the ESG themes of the companies potential target for investment.

    The investment policy of the Fund focuses on companies (hereinafter referred to as “Companies” or “Startups”) operating in sectors and markets characterized by the technological and commercial challenges arising from the post-pandemic Covid-19 recovery and on opportunities arising from the resources of the so-called Recovery fund. The Fund will have as its main focus of investment innovative companies operating in the following sectors: (i) healthcare and health technologies; (ii) digitization, software, internet of things, artificial intelligence and cyber security; (iii) new space economy; (iv) green revolution, sustainability and ecological transition.

    The Fund intends to qualify as an OICR that mainly invests in innovative startups or SMEs and, therefore, it is expected that such investments will represent at least 70% of the total value of the Fund’s assets resulting from the management statement.

    The investment operations will be the so-called early stage and growth/expansion capital round, intended as investments to support companies in the early stages of life.

    The target companies of the Fund, i.e. high-tech startups and the reference sectors mentioned above, make the Fund’s strategy aligned with some of the United Nations (UN) Sustainable Development Goals (SDG) defined as, for example:

    Objective 3 – Ensure health and well-being for all and for all ages;

    Objective 7 – Ensure access to affordable, reliable, sustainable and modern energy systems for all;

    Objective 8 – Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all;

    Objective 9 – Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation;

    Objective 12 – Ensure sustainable consumption and production models;

    Objective 13 – Promote actions at all levels to combat climate change.

    In this context and in line with the above-mentioned Sustainable Development Goals (SDGs), the Fund promotes the following environmental characteristics:

    – Sustainable use and protection of water;
    – Prevention and reduction of pollution;
    – Mitigation of climate change;
    – Adaptation to climate change.

    The social characteristics mainly concern:

    – Human capital development;
    – Respect for diversity;
    – Health and safety at work;
    – Involvement of local communities.

    In addition to these general considerations, the Fund adopts appropriate measures in the analysis and management of ESG issues as described in section 4.

  4. Investment strategy

    On the basis of the Fund’s environmental and social characteristics and investment strategy, the Fund does not make investments in Companies operating in the following areas: (i) companies engaged in illegal economic activities (meaning production, trade, or other activities that are illegal and/or unlawful under the regulations applicable to the Fund or the relevant companies, and/or applicable to such production, trade, or activities); (ii) companies that manifestly infringe on human rights in the conduct of their business; (iii) enterprises engaged in human cloning; (iv) enterprises engaged in the production or marketing of military systems; (v) enterprises engaged in the production or marketing of pornographic material; (vi) enterprises engaged in the production or marketing of electronic solutions or programs that are specifically contrived to illegally enable: (x) access to electronic networks, and/or (y) the downloading of data in electronic format; (vii) enterprises engaged in the research and development of programs, electronic solutions, or other activities that specifically give support to any of the above sectors or activities.

    Furthermore, in addition to what is stated in Section 3 regarding sectors of the fund’s investments and the type of target companies and what is stated above on the exclusion of certain sectors, the Fund has integrated specific ESG activities in both environmental, social, and governance areas into its investment processes and procedures.

    These processes are aimed at promoting environmental and social characteristics as well as good governance practices of the invested companies.

    The Fund has developed, with the support of specialized external consultants, tools for the analysis of ESG issues of the target Companies, developed according to the industrial sectors where they operate.

    Based on these analyses, risks related to ESG issues are subsequently analyzed and considered in the analysis of the control functions, including eventually the support of specialized external companies.

    As part of the so-called due diligence activities, areas of intervention on ESG issues are also defined, in cases where this is possible (depending on the company’s stage of development and the Fund’s actual role in the company’s ownership structure), which can be short, medium or long term.

    The activities carried out by the Company on ESG issues, in cases where it is possible, are monitored through the information sent by the management of the Company according to the specific agreements signed between the fund and the Company itself (for example, agreeing on a forecast of specific activities in the ESG sphere based, also, on the sector to which it belongs).

    In relation to PAIs, where possible, it is included within the agreements between the Fund and the Company that any PAIs are reported to the SGR through a model provided by the Kairos policy.

    Finally, in the case of the Companies’ divestment processes, the progress inherent in ESG issues during the management period will be analyzed.

  5. Investment proportion

    During the Fund’s processes of investment selection and managing, the Fund pays particular attention to environmental, social and governance (ESG) factors, as described in Sections 3 and 4. For these purposes, the SGR has adopted a policy of responsible investment, defined as the inclusion of ESG factors in investment decisions.

    The Fund may invest in sustainable assets (such as purely environmentally sustainable assets), selected and evaluated according to the Fund’s investment policy, but without defining a minimum proportion of sustainable investments in advance.

  6. Environmental or social feature monitoring

    As indicated in Sections 3 and 4, in the framework of the investing process in a Company and where possible, areas of action on ESG issues are identified and a plan of activity on these areas is agreed with the Company.

    Monitoring of ESG activity is, therefore, included and considered as part of the overall monitoring of the Fund’s portfolio Company along with, for example, business development indicators or financial indicators.

  7. Methodologies related to environmental or social features

    An analysis on ESG issues of the Fund’s target companies is carried out within the investment and monitoring process, as outlined in Section 4 and 6, for the purpose of promoting the Fund’s environmental or social characteristics.

  8. Data sources and processing

    The SGR makes use of both dedicated in-house expertise and external consultants specialized in ESG as a source of relevant data and information on the management of ESG processes.

    Within this context, the following reference sources in the information systems developed through specialized consultants suitable to support the ESG analyses of the Companies have been used, by way of example but not limited to: i) Sustainability Accounting Standards Board (SASB) ii) Global ESG Benchmark for Real Assets (GRESB) iii) S&P Global Rating.

    Data are acquired based on information provided by the Company’s management, depending on the specific agreements provided with the Company.

    The amount of data that can be estimated is a function of the characteristics of the Company and the level of interaction between management and the Fund depending on the characteristics of the Companies, e.g., stage of business development and industry sector as well as the role of the Fund (e.g. lead or follower investor, presence or absence of other investors).

  9. Limitations of methodologies and data

    The lack of data provided by the Companies represents a limiting factor for the purpose of promoting social or environmental characteristics.

    This lack appears likely given the Fund’s specific investment strategy directed in particular at so-called early-stage startup therefore unstructured, diversified among themselves, with limited economic and operational resources and, tendentially, without critical dimensional mass that makes the applicability of certain ESG parameters less likely.

    In order to reduce this risk, where possible, specific information sets are agreed with each Company based on their characteristic.

  10. Due diligence

    As indicated in Sections 4 and 6, the internal processes prepared include a special ESG issue analysis activity that are carried out throughout the entire investment phase of the Companies, starting from the ESG issue analyses upstream of the investment, to monitoring during the management of the investment, and up to the divestment phase.

  11. Engagement policies

    Engagement policies are managed at the SGR level through, in particular, a specific reference policy called “The Responsible Investment of Kairos.”

    The investment processes prepared for the Fund also encourage an education and engagement activity with the Companies given, in particular, the stage of initial development.

  12. Designated benchmark index

    A specific benchmark index for the Fund to pursue environmental and social characteristics has not been designated.

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