Sustainable Finance Disclosure Regulation (SFDR)

The Sustainable Finance Disclosure Regulation (“SFDR“) is a European regulation that requires financial market participants, like Vortex Capital Partners B.V. (‘Vortex” or the “Manager“), who is registered with the AFM on the basis of the ‘light regime’ of Section 2:66a of the Dutch Financial Supervision Act (“FSA“), and financial advisers in the EU to disclose information related to Environment, Social aspects and Governance (“ESG“). The SFDR entered into force on 10 March 2021. 

The Taxonomy Regulation establishes the basis for the EU taxonomy by setting out overarching conditions that an economic activity has to meet in order to qualify as environmentally sustainable. This regulation also contains obligations for financial products which are not marketed as green or sustainable. 

In accordance with the SFDR and the Taxonomy Regulation, the Manager provides the following statements. 

Qualification of the Funds under the SFDR and Taxonomy Regulation  

The funds managed by Vortex Capital Partners are designated as follows: 

• Vortex Capital Partners II Coöperatief U.A.: SFDR Article 6
• Vortex Capital Partners Fund III Coöperatief U.A.: SFDR Article 6
• Vortex Capital Partners Continuation Fund I Coöperatief U.A.: SFDR Article 6
• Vortex High Growth Fund B.V.: SFDR Article 6 

For the above funds, the Manager complies with the disclosure requirements under the Articles 3, 4 and 5 of the SFDR, as further laid down below. 

• Vortex Capital Partners Fund IV Coöperatief U.A.: SFDR Article 8 

Vortex Capital Partners Fund IV Coöperatief U.A (“VCP Fund IV”) promotes environmental and/or social characteristics (“light-green”) within the meaning of Article 8 SFDR. This fund does not have sustainable investment as its objective.  

VCP Fund IV promotes environmental and/or social characteristics, provided that companies in which the investments are made follow good governance practices.  

For VCP Fund IV, the Manager complies with the additional disclosure requirements under Article 10 of the SFDR.  

The investments underlying these financial products do not take into account the EU criteria for environmentally sustainable economic activities. 

ARTICLE 3  – SUSTAINABILITY RISKS 

The Manager acknowledges that environmental, social or governance-related events or conditions could, if they occur, cause an actual or a potential material negative impact on the value of the investments in the Funds. The Manager views ESG as a standard topic in the pre-investment due diligence process of Portfolio Companies. Sustainability risks are therefore part of the Manager’s selection and due diligence procedures and its risk management policy.

ARTICLE 4  – PRINCIPAL ADVERSE IMPACTS  

Vortex considers the Principal Adverse Impacts (PAIs) of its investment decisions on sustainability factors only for funds designated as ‘Article 8’ funds. Principal adverse impacts relate to those impacts of investment decisions that result in negative effects on sustainability factors. 

Vortex considers the principal adverse impacts of its investment decisions on sustainability factors as part of its due diligence processes and procedures.  

Vortex will publish a PAI Statement annually following each reference/reporting period. Vortex will publish the PAI Statement for the reference period 1 January 2024 – 31 December 2024 by 30 June 2025.  

ARTICLE 5 – REMUNERATION POLICIES  

Remuneration of the board members and the staff of the Manager are in line with market practice and its fixed and variable components do not encourage excessive risk taking related to sustainability risks. 

ADDITIONAL DISCLOSURES FOR ARTICLE 8 FUNDS (ARTICLE 10 REQUIREMENTS)  

The disclosures contained in this section relate only to VCP Fund IV.  

SUMMARY 

Vortex Capital Partners Fund IV promotes environmental and/or social characteristics (“light-green”) within the meaning of Article 8 SFDR. The Fund does not have sustainable investment as its objective. 

2. NO SUSTAINABLE INVESTMENT OBJECTIVE 

VCP Fund IV intends to promote environmental and/or social characteristics. VCP Fund IV does not have a sustainable investment objective.  

3. ENVIRONMENTAL OR SOCIAL CHARACTERISTICS OF THE FINANCIAL PRODUCT 

E/S characteristics + indicators: 

The Fund aims to promote environmental and/or social characteristics relevant to the tech and tech-enabled companies in which it invests.  

The environmental and/or social characteristics promoted by VCP Fund IV will be determined by Vortex at the time of each new investment, by assessing which environmental and/or social factors are most relevant for the industry or sector in which the portfolio company operates (a ‘materiality assessment’). Vortex does not expect all characteristics mentioned above to be relevant to all portfolio companies, rather the Fund will promote only the environmental and/or characteristics which are relevant to each portfolio company. Sustainability indicators used to measure the attainment of each of the environmental and/or social characteristics promoted by the Fund will therefore also be defined per each portfolio company.  

4. INVESTMENT STRATEGY 

General Fund strategy: 

The Fund’s investment strategy is to invest, and take majority positions, in technology companies that have the potential to grow fast organically and through acquisitions (in a so-called buy-and-build strategies). Key sectors for investment are software, business services, tech-enabled services, internet and online marketplaces. Target companies are headquartered mainly in the Benelux, as well as the Nordics and Germany. 

The main objective of the Fund is to realise medium-term and long-term capital appreciation for the investors of the Fund. 

ESG integration strategy: 

Vortex recognises that a responsible approach to investing is a key element in better managing investment risks and generating medium- and long-term value for investors of the Fund. Therefore, Vortex integrates ESG considerations into the investment decision-making process and into investment management activities for the Fund. The Manager’s approach includes, but is not limited to, consideration of sustainability risks. Sustainability risk means ‘an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material impact on the value of an investment’.  

As part of the investment selection and due diligence process, Vortex will identify relevant ESG risks and subsequently determine whether the identified risks are material in relation to the company and the Fund’s investment strategy.  

Due diligence of companies prior to investment incorporates a top-down approach to screening against an exclusion list, as well as a bottom-up approach with respect to collection and assessment of data on material ESG factors. Environmental and social characteristics, as well as the investee company’s governance practices, may influence the investment decision. 

ESG integration is guided by the Manager’s Responsible Investment Policy.

5. PROPORTION OF INVESTMENTS 

Vortex expects that at least 50% of the Fund’s investments will contribute to attaining the environmental or social characteristics promoted by the Fund. However, all investments will be subject to the binding elements of the Fund’s investment strategy, being screening against exclusion criteria. 

6. MONITORING OF ENVIRONMENTAL OR SOCIAL CHARACTERISTICS 

Methodology to measure and monitor E/S characteristics: 

While Vortex expects that all new investments will contribute to attaining environmental and/or social benefits, performance of each portfolio company will be measured in relation to specific environmental and/or social targets relevant for that company.   

Data sources and processing:  

Vortex will collect data on relevant sustainability indicators, including principal adverse sustainability indicators, directly from each portfolio company. Portfolio companies are expected to provide actual data on a ‘best effort’ basis, and where appropriate, may estimate data points. As such, the Manager may observe limitations to the data provided.  

7. METHODOLOGIES 

Screening criteria: 

As a minimum requirement for eligible investment in VCP Fund IV, Vortex implements a screening process for all new investments. Initial screening prior to investment involves a high-level assessment of sustainability risks and screening against exclusion criteria.  

Vortex will exclude companies that are directly involved in certain activities that are deemed to be non-ethical, harmful to society or the environment, or not in line with Vortex’ values. Exclusions are further detailed in Vortex’ Exclusion Policy.  

Due diligence process: 

Vortex’ due diligence on proposed companies includes consideration of sustainability risks and opportunities, as well as the company’s governance practices. Proposed companies are required  

to complete an ESG questionnaire and to provide supporting documentation on certain ESG topics. Results of the ESG due diligence may influence the investment decision. 

Integration of ESG considerations into Vortex’ investment decision-making process is guided by the Vortex Responsible Investment Policy.  

8. ENGAGEMENT POLICIES 

Vortex engages with portfolio companies to promote good governance practices, promote improvement on sustainability indicators, and support the sustainability ambitions of the portfolio  

companies. 

Vortex aims to collaborate with each portfolio company or create an action plan where the Manager expects to be able to improve the company’s performance against certain indicators. 

9. DESIGNATED REFERENCE BENCHMARK 

Vortex does not apply a designated benchmark for the promotion or attainment of the environment and/or social characteristics. 

10. REPORTING 

The Manager shall comply with all applicable disclosure and reporting requirements under the SFDR. 

Pre-contractual disclosures are made available upon request.  

Periodic reports will be made available following each reporting period.