Citi Private Advisory - 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 Private Advisory, LLC (CPA) 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 CPA 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 CPA’s due diligence and approvals processes, and then monitored on an ongoing basis.

CPA 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.

CPA does not consider the adverse impacts of investment decisions on sustainability factors at the present time in respect of the alternative investment funds which it 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. However, the underlying third party fund may consider the adverse impacts of investment decisions on sustainability factors.

CPA is currently considering the sufficiency and accuracy of the data available to it in respect of the investments made by those funds. If, in the future, CPA determines that sufficient information and data is available to make an adequate assessment, CPA expects to update its approach and policies accordingly, which information shall be made available via this website.

At CPA, we revisit our processes on a regular basis to ensure they are informed by industry practice. Our Sustainability Risk Standard is no exception, recognising that the integration of sustainability risk is an evolving and dynamic area. As such, we may edit this page from time to time to ensure it accurately reflects our practices.

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

This page was last updated on 1st September 2022