SFDR Disclosure

AvCap Investments Luxembourg S.C.Sp. SICAV-RAIF 

Article 8 product level disclosure in line with Article 10 of SFDR  

January 2023  

AvCap Investments Luxembourg S.C.Sp. SICAV-RAIF (the “Fund”), qualifying as a reserved alternative investment fund, is an unregulated investment fund, which is not subject to the prudential supervision of the Commission de Surveillance du Secteur Financier, the Luxembourg supervisory authority of the financial sector (CSSF), or any other Luxembourg supervisory authority, although it qualifies as an alternative investment fund within the meaning of the Luxembourg law of 12 July 2013 on alternative investment fund managers. Consequently, this document will not be submitted to the CSSF or any other Luxembourg supervisory authority for formal approval of this Company.  

In addition to Avellinia Capital Group’s efforts to serve the underbanked SME sector by financing SME lending portfolios and providing the financing for responsible consumer lending, both originated by tech-enabled (‘fintech‘) lenders, we have gone a step further in our ESG commitment by classifying our alternative credit fund AvCap Investments (Luxembourg) SCSp SICAV-RAIF as an ‘Article 8 Fund’ in accordance with the new EU regulation on sustainability-related disclosure in the financial services sector (the “SFDR”). This alternative credit fund promotes environmental or social characteristics, but does not have sustainable investment as its objective. That said, Avellinia Capital will opt to invest in suitable assets that have ESG objectives from time to time since it is our view that building more resilient portfolios linked to ESG and sustainable investments will create more stable and higher returns. 

Investment Objective and Policy  

The Fund’s investment objective is to deliver attractive risk-adjusted returns and to promote, among other characteristics, environmental or social characteristics. In particular, the promotion of social objectives is addressed by financing small and medium enterprises, and individuals underserved by traditional banking sectors, thereby contributing to more inclusive financial systems, promoting consumer choice and counteracting natural monopolies through innovation. The Fund seeks to achieve its objective primarily by investing in credit assets originated by innovative credit providers, such as financial technology companies (‚fintechs’) and other companies which provide alternative credit products that address the lack of available financing.  

In pursuing this investment objective, the Fund falls within the scope of article 8 of the SFDR. The Fund aims to make investments that promote the social objective of financial inclusion for underserved companies and individuals. In addition, it aims to promote environmental objectives, on a case-by-case basis, for example through financing the assets of micro-mobility and circular economy solutions. It does this by investing in accordance with its ESG policy (as it may be revised from time to time, the “ESG Policy”) and targets investments which are considered by the Alternative Investment Fund Manager and the Investment Advisor as contributing to decent work and economic growth, addressing gender equality, or reducing inequality, among other social objectives, and / or environmental objectives. The Fund seeks to achieve its investment objective primarily by investing in credit or other financial assets of alternative credit providers while following a comprehensive approach consisting of a blend of ESG integration, exclusions and engagement. In order to mitigate any negative impact of the investment decisions on other investment objectives, the Fund seeks to exclude investments with ESG risks informed by the materiality standards outlined by external parties such as SASB and practices supported by external parties such as PRI. Where sustainability risks cannot be mitigated to a satisfactory extent, the investment may not proceed. The investment process implemented allows the Alternative Investment Fund Manager and the Investment Advisor to identify and prioritise the potential adverse sustainability impacts of investment decisions, and to demonstrate that each investment decision made does not significantly harm other ESG objectives. Additionally, the soundness of governance structures and practices of the alternative credit providers is an integral part of the due diligence process.  

Please also see fund specific SFDR disclosures here on our AIFM's website, by searching for the respective fund.