The Sustainable Finance Disclosure Regulation
Citi Private Advisory LLC
Citi Global Alternatives - Alternative Investment Fund Manager
Sustainable Finance Disclosure Regulation Information
Integration of Sustainability Risk
Article 3(1) of SFDR requires all financial market participants to publish on their websites information about their policies on the integration of sustainability risks in their investment decision-making process. "Sustainability risk" is defined in SFDR as "an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment."
Citi Global Alternative, LLC (CGA) is a financial market participant where it acts either as the alternative investment fund manager (AIFM) or as a portfolio manager for alternative investment funds offered within the European Union. In this context CGA acts as an AIFM or portfolio manager to 'feeder' funds which invest predominantly all of their assets into underlying third party 'master' funds and also as the AIFM or portfolio manager of a fund of funds which invests in underlying third party funds. These underlying funds are selected and approved under CGA's due diligence and approvals processes, and then monitored on an ongoing basis.
CGA implements a two-tier assessment covering both the third-party manager and the fund. At manager level, the relevant investment research and operational due diligence teams will assess how far sustainability risk is embedded into the organisation, its governance, the day-to-day running of the fund, and the manager's investment decision-making process. At fund level, the investment research team will assess the extent to which the manager has integrated sustainability risk into its investment decision-making process for the fund. The manager level and fund level sustainability risk assessments are then combined to produce an overall sustainability risk profile.
As part of the approval process for including third party funds in its investment universe, the overall sustainability risk profile of the manager and the fund is considered along with other factors, including the depth and breadth of experience within the investment team, a consistent and disciplined investment approach, track record, market opportunity, and other risk factors. Accordingly, sustainability risk is considered in the round on an integrated basis, along with these other factors, which collectively drive an overall assessment of the fund.
We also review managers of third-party funds included in our platform on a periodic basis. As part of these reviews, we assess whether there have been any material changes to the sustainability risk profile associated with the fund or third party manager, and where this is the case, may escalate matters internally to determine any appropriate action.
No Consideration of Sustainability Adverse Impacts
This disclosure is made for the purposes of Article 4(1)(b) of SFDR.
CGA does not consider the adverse impacts of investment decisions on sustainability factors in respect of the alternative investment funds which it makes available in markets into the European Union. "Sustainability factors" are defined by SFDR as environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. This is because typically, CGA offers third-party funds (or feeder funds into third-party funds) whose managers are either not in scope of SFRD, or rely on an exemption from PAI entity reporting requirements. However, in some instances, the manager may consider the adverse impacts of investment decisions on sustainability factors.
CGA recognises this is an evolving area and we may modify our approach and as such, we may edit this page from time to time.
Transparency of Remuneration Policies in Relation to the Integration of Sustainability Risks
Citi's compensation philosophy exists to appropriately balance the incentives offered to employees who take risks to achieve financial and competitive performance and the need to prudently manage those risks along with other imperatives.
As part of the overall Citi Compensation philosophy, one of the principle objectives is to encourage behaviours that are in the best interests of our customers, shareholders and the goals of the organization, including environmental and social objectives.
Our compensation philosophy encompasses all activities and incorporates a number of perspectives including:
Shareholder and other stakeholder considerations;
Ethics, culture and leadership principles;
Risk management and regulatory guidance; and
Encouraging the best behaviours
Our compensation approach include the use of a scorecard approach with financial metrics and nonfinancial objectives, including environmental, social and corporate governance factors, to link pay to performance to compensate executives and other senior managers.
Products which promote Environmental and/or Social characteristics
European Buyout Offshore Feeder Fund, Ltd
Products which have Sustainable Investment as their objective
AP Impact Offshore Fund SCSp SICAV-RAIF