Our sustainability principles
The basics
– Illusian Partners Oy is an authorised Alternative Investment Fund Manager (AIFM), pursuant to the Finnish Act on Alternative Investment Fund Managers (162/2014) (the “AIFML”).
– The AIFM manages AIF funds with fund-of-fund and private equity strategies. It also offers investment services to professional clients.
– Considering relevant sustainability risks related to environmental, social, and governance matters is an integral part of the due diligence process of the AIFM when selecting investments.
– For the time being, the AIF fund that Illusian Partners manages is categorised as an Article 6 fund according to the SFDR regulation.
– All parties involved in our investment process follow the principles stated on this page and guidance provided by the Board of Directors.
Sustainability in investment decision-making
ESG implementation & due diligence
We expect all the companies and funds we invest in to operate responsibly and take environmental, social, and governance (ESG) aspects into account. We consider sustainability risks in the AIFM’s investment due diligence processes. Regarding direct investments, we screen potential ESG risks and opportunities and potential negative and positive impact of the investment. Regarding fund investments, we review the funds’ due diligence and ESG processes and analyse potential risks and opportunities. We discuss any potential risks during the investment decision-making process and document these in investment proposals.
Active ownership & monitoring
Our active ownership is based on open and continuous dialogue. We systematically meet with and monitor the portfolio companies and funds, helping them develop their practices and solve problems if needed. Naturally, ESG is on the agenda of our regular meetings and calls, and we discuss those when relevant. We also ask about the ESG policies of our portfolio companies and funds regularly to monitor and track the ESG status of the entire portfolio.
Sectoral exclusions
We don’t invest in companies focusing on tobacco, pornography, controversial weapons, palm oil, gambling & casinos, fossil fuels, fur, non-pharma animal testing, private prisons, or predatory lending.
Thematic investing
While we’re industry agnostic, we continuously research investment themes connected to the environment and social inclusion and search for more investment opportunities in those fields.
No consideration of adverse impacts of investment decisions on sustainability factors
For now, the AIF fund that Illusian Partners manages is categorised as an Article 6 fund according to the SFDR regulation. It means that for now, Illusian Partners doesn’t consider adverse impacts of investment decisions on sustainability factors as meant in Article 4(1) of the EU Regulation 2019/2088 on sustainability-related disclosures in the financial services sector.
The main reason for this is the unclear regulatory environment and the regulatory incompleteness. In addition, our portfolios consist of several minority investments in unlisted early-stage companies, and several fund investments with minority investments in unlisted companies. Therefore, reporting of principal adverse impacts is challenging as it isn’t certain whether all data can be reliably obtained.
Still, we always aim to consider sustainability factors (environmental, social, and employee matters, human rights, anti‐corruption, and anti‐bribery) when making investment decisions, as described above.
For now, Illusian Partners Oy does not consider adverse impacts of investment decisions on sustainability factors in its investment advice in a unified way.
The main reason for this is that our customers may have very diverging sustainability preferences and all investment advice will be tailored to each customers preferences. Therefore, having specific binding criteria and thresholds or reporting of principal adverse impacts in a consistent way is challenging as it isn’t certain whether all data can be reliably obtained and consolidated as well as presented in a coherent and understandable way.
Still, we always aim at taking relevant sustainability factors (environmental, social, and employee matters, human rights, anti‐corruption, and anti‐bribery) into consideration when making investment decisions or offering investment advice, as described above, in line with each customer’s specific preferences. We include the analysis of principal adverse impact statements to the selection of investment products we recommend by using the information published by financial market participants. In this way make sure that our advice is in line with the specific preferences by each client.
We are evaluating the ability to consider principal adverse impacts in a meaningful and consistent way in our operations and will change our processes as and when it becomes feasible.
Management processes
We aim to minimise the ecological footprint and take environmental and social sustainability as well as sound ethical principles into account in all our operations.
Our Board of Directors ensures sustainability risks are considered in decision-making procedures, organisational structure, compliance controls, internal reporting, record keeping, and risk management policies and procedures of the company.
Relevant sustainability risks for the operations of the AIFM are included in the annual risk assessment conducted by the compliance function. They go through the investment strategies, due diligence conducted, and the risk limits of the funds. The Board of Directors reviews the compliance and risk management reports annually.