This page sets out the sustainability-related disclosures of the following entities:

• FCM Frederic Capital Management GP S.à r.l. (LEI: 529900UME8AQN69CGH66)
• FCM Select GP S.à r.l. (LEI: 529900VIURSV8C6HDQ53)
• FCM PE GP S.à r.l. (LEI: pending, to be updated upon issuance)

(each an “AIFM” and together the “AIFMs”), Luxembourg-based registered alternative investment fund managers within the meaning of Article 3(2)(b) of Directive 2011/61/EU of 8 June 2011 on alternative investment fund managers (“AIFMD”), as implemented in Luxembourg by the law of 12 July 2013 on alternative investment fund managers (the “AIFM Law”).

The AIFMs make the following disclosures for the purposes of Regulation (EU) 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”) and Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment (the “Taxonomy Regulation”).

As clarified by the European Commission in its Q&As on sustainability-related disclosures published on 14 July 2021, the AIFMs must comply with certain SFDR requirements applicable to registered alternative investment fund managers.

I. Fund-Level Disclosures (Article 6 SFDR)

The AIFMs act as registered alternative investment fund managers of the following funds:

• FCM Frederic Capital Management GP S.à r.l. – FCM Opportunities Fund II SCS and FCM Opportunities Fund III SCS
• FCM Select GP S.à r.l. – FCM Select SCS
• FCM PE GP S.à r.l. – FCM Secondary Opportunities II SCS

Each of the above funds qualifies as an Article 6 product under SFDR, as it integrates sustainability risks into the investment decision-making process but does not promote environmental or social characteristics (Article 8 SFDR) and does not have sustainable investment as its objective (Article 9 SFDR).

Sustainability risks may affect the performance of the respective funds having regard to the types of investments made or to be made in accordance with their respective investment policies and objectives, meaning that if any such risk occurs, returns on investments may be materially negatively affected as a result.

II. AIFM-Level Disclosures (applicable to all AIFMs)

Transparency of sustainability risk policies and the integration of sustainability risks – Article 3(1)

General overview

A sustainability risk refers to an environmental, social or governance (“ESG”) event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.

The AIFMs review and assess potential sustainability risks within the meaning of SFDR as part of their decision-making processes with respect to investments to be made by the respective funds and have integrated such review within their internal procedures and policies, as further detailed hereafter.

Relevance of sustainability risks

Sustainability risks may affect the performance of the respective funds having regard to the types of investments made or to be made in accordance with their respective investment policies and objectives, meaning that if any such risk occurs, returns on investments may be materially negatively affected as a result. Investors and potential investors should note that it is difficult to assess with reasonable certainty the probability of the occurrence of such risks and the likely impact of such materialised sustainability risks on the value of investments.

Assessment process

The identification and assessment of risks, including sustainability risks, will take place on an ongoing basis if and when investments are made in accordance with the respective funds’ investment policies. Such review is performed by the respective AIFMs, as summarised below:

• Prior to an investment decision being taken on behalf of a relevant fund, the respective AIFM identifies the material risks, including sustainability risks, associated with the proposed investment.
• These risks form part of the overall investment proposal to be assessed by the respective AIFM.
• Ultimately and following its assessment, the respective AIFM makes the relevant investment decision having regard to the relevant fund’s investment policy and objectives and, where applicable, subject to the Investment Committee’s approval.

No consideration of adverse impacts of investment decisions on sustainability factors – Article 4(1)(b)

Article 4(1) of the SFDR requires fund managers such as the AIFMs to provide a clear statement as to whether or not they consider the “principal adverse impacts” of investment decisions on sustainability factors, i.e. environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

In case such fund managers do not consider such principal adverse impacts, Article 4(1)(b) of the SFDR requires them to include clear reasons for why they do not do so, including, where relevant, information as to whether and when they intend to consider such adverse impacts.

Although ESG and sustainability risks are important to the AIFMs, they do not consider the adverse impacts of investment decisions on sustainability factors in the manner prescribed by Article 4(1) of SFDR. In addition to the fact that the General Partners may not take an “active” role in managing the underlying target investments of the respective funds, they consider that the relevant data needed to identify and weight principal adverse sustainability impacts is not yet available in the market to a sufficient extent or of the required quality.

The AIFMs will review the data situation on a regular basis as well as their arrangements with managers of target funds and, if necessary, decide again on this basis on the possibility of taking into account principal adverse impacts of investment decisions on sustainability factors as part of their strategy.

Transparency of remuneration policies in relation to the integration of sustainability risks – Article 5(1)

For the purposes of Article 5(1) of SFDR, the AIFMs declare that they have not put in place a remuneration policy in light of the fact that they qualify as registered alternative investment fund managers and thus do not fall under such requirement under the AIFMD. Sustainability risks are not considered with respect to the determination of remuneration.