The integration and evaluation of sustainability risks form part of the investment process implemented by Seroba.

When assessing the sustainability risk associated with underlying investments, Seroba is assessing the risk that the value of such underlying investments could be materially negatively impacted by an environmental, social or governance (“ESG”) event or condition.

Our focus it to make investments in the life sciences sector in medical devices and therapeutics that promote health and well-being, while considering the ESG impact of our investment in a company.

Seroba believes that responsible ownership and business success go hand in hand and, as such, it has embedded consideration of ESG factors as part of its investment process. Seroba is fundamentally committed to building businesses, which will grow, provide employment and generate economic benefit in an environmentally and socially responsible manner, both during and after our ownership. We believe a strong correlation exists between sustainable investment and the generation of competitive returns for our investors.

Seroba aims to invest in companies that take a responsible approach towards the environmental and social impact of its business activity and the manner in which its business is managed. Together, these factors are known as Environmental, Social and Corporate Governance (‘ESG’) and sustainability is derived from consideration of each of these factors.

ESG processes and procedures focus on non-financial performance indicators that address a company’s approach towards sustainability, its impact on society and the environment, as well as other ethical and corporate governance considerations.

Our ESG processes and procedures include:

• incorporating relevant ESG issues into our investment due diligence, analysis and decision-making processes. Integral to our due diligence process is an assessment of the target company’s ESG-related risks and opportunities and those material to the industry in which it operates. A component of the investment papers presented to the investment committee is an ESG section that serves to identify these ESG-related issues;
• seeking appropriate disclosures and assurances on relevant ESG issues from the entities in which we invest and its management team; and
• being active shareholders and incorporating relevant ESG issues into our ownership policies and practices and assisting portfolio companies in the development of action plans to adequately address any identified ESG-related risks and opportunities.

Seroba has adopted a policy which details the integration of sustainability risks in the investment decision-making process which is consistent with the above. In addition, the valuation of the fund’s investments are monitored on a quarterly basis and revised where necessary after taking into consideration all issues facing the company including an material environmental, social and governance issues.

Seroba Life Sciences Management Limited meets the criteria to be “sub-threshold” for AIFMD purposes and is registered, without a need for full authorisation, for AIFMD purposes. Accordingly, Seroba are not required to have a formal remuneration policy.  However, as ESG-related issues are incorporated into our valuations, Seroba’s remuneration for managing the fund integrates sustainability risks, as required by the EU Sustainable Finance Disclosure Regulations (2019/2088).

An ESG event, should it occur, may negatively impact on the return to limited partners of our funds. While any such impact may vary, an ESG event may impair the valuation of investments, including the loss of the entire amount invested.

Seroba has less than 500 employees, and accordingly falls outside the scope of Article 4 of the EU Sustainable Finance Disclosure Regulations (2019/2088) (“SFDR”). Seroba has chosen not to opt into the requirements regarding the consideration of the principal adverse impacts of investment decisions on sustainability factors at this time. We offer the following information regarding our rationale:

• we believe that responsible corporate behaviour, the promotion of sustainability, and sound governance practices contribute to the long-term performance of investee companies. Such practices and behaviours address the interest of a broad range of a company’s stakeholders including shareholders, creditors, employees, suppliers and the communities in which it operates;
• we believe the proper management and mitigation of sustainability risks is a primary duty of company’s management and board of directors;
• while the integration of material ESG issues is a fundamental component of our investment process, we do not believe our investment decisions have a direct adverse impact on sustainability factors; Rather we believe our most influential strategy for addressing sustainability factors is through engagement activities and exercising voting rights.

Seroba may choose at a later date to publish and maintain on its website the consideration of principal adverse impacts of investment decisions on sustainability factors.