APEX Ventures GmbH (“APEX”) considers sustainability risks as part of its investment decision-making process. Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. APEX considers sustainability risks as part of the due diligence process prior to any investment. This also includes an assessment of sustainability risks. Such assessment is being conducted using a questionnaire. The results of such assessment are taken into account when the investment decision is being taken. APEX remains free in its decision to refrain from investing or to invest despite sustainability risks in which case APEX can also apply measures to reduce or mitigate any sustainability risks. At all times, APEX will apply the principle of proportionality taking due account of the strategic relevance of an investment as well as its transactional context.
Principal adverse sustainability impacts statement
APEX considers principal adverse impacts of its investment decisions on sustainability factors before and after investments. Sustainability factors mean environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery. No sustainability indicators are currently used. APEX collects information regarding principal adverse impacts from portfolio companies using a questionnaire prior to the investment as well as on an ongoing basis. This principal adverse impact statement dates as of 2 August 2022.
Description of principal adverse sustainability impacts
APEX has not identified any adverse sustainability impacts related to its investments to date.
Description of policies to identify and prioritise principal adverse sustainability impacts
Prior to any investment, APEX conducts due diligence. Part of this due diligence includes checking whether the investment could have a negative impact on sustainability factors. This check is performed using a checklist. The necessary information is obtained from the respective portfolio company. After an investment, i.e., during the holding period, a check is carried out at regular intervals to determine whether there have been or could be any adverse effects on sustainability factors. This review is carried out annually based on a checklist. In addition, the portfolio companies are expected to notify APEX in writing on an ad hoc basis if any adverse effects on sustainability factors become apparent. If adverse effects on sustainability factors are identified before or after an investment, they are taken into account in light of the circumstances of the individual case, in particular considering other impacts of the investment, its size, strategic importance and transactional context.
APEX decides at its sole discretion whether or not to make an investment in light of principal adverse impacts on sustainability factors, and APEX may apply risk mitigation measures where appropriate. APEX organizes an onboarding session for each portfolio company it invests in. During such onboarding sessions APEX discusses with and explains to the management of those portfolio companies how they can incorporate and implement consideration of adverse impacts into their daily operations.
References to international standards
APEX is not a member of any international bodies, organizations or required by any national or international convention or standard to comply with any further requirements.
APEX One Best in Class EuVECA GmbH & Co. KG (the “Fund”) incorporates ESG principles within its investment processes and within its monitoring processes.
No sustainable investment objective
Sustainable investment is not an objective of the Fund.
Environmental or social characteristics of the financial product
The Fund does not invest, guarantee or otherwise provide financial or other support, directly or indirectly, to companies, including portfolio companies, or other entities whose business activity consists of:
- Distilled alcohol
- Weapons and ammunition
- Casinos and equivalent enterprises
- Specific electronic data programs or solutions relating to the aforementioned activities or pornography
The Fund invests in selected portfolio companies from the exisiting APEX One fund.
Proportion of investments
The Fund does not invest a fixed percentage in portfolio companies aligned with environmental and/or social characteristics. The Fund will invest fully in line with its investment strategy. No portion of the Fund’s capital will be allocated to other asset classes.
Monitoring of environmental or social characteristics
APEX monitors for the Fund ESG compliance on an ongoing basis. On an annual basis, APEX provides its portfolio companies with a questionnaire to assess any potential or existing adverse sustainability impacts. APEX carefully reviews such completed questionnaires upon receipt. Furthermore, APEX will apply best efforts when negotiating an investment into a portfolio company, to reach a side letter agreement requiring the portfolio company to notify APEX in writing on an ad hoc basis if any adverse effects on sustainability factors become apparent. In such cases, APEX reviews all information provided ad hoc by the portfolio companies and determines in its sole discretion whether any actions need to be taken to address any potential or existing adverse impacts.
Currently, the methodologies applied comprise of collecting information via a questionnaire from the portfolio companies either prior to the investment, i.e. within the due diligence process, or following the investment. Additionally, APEX will apply best efforts when negotiating an investment into a portfolio company, to reach a side letter agreement requiring the portfolio company to notify APEX in writing on an ad hoc basis if any adverse effects on sustainability factors become apparent. There is currently no quantitative measurement with regard to environmental or social characteristics and no sustainability indicators are currently used.
Data sources and processing
The questionnaire is completed by the portfolio company. Further research and investigation by APEX is not being conducted regularly.
Limitations to methodologies and data
The Information collected via the questionnaire as part of APEX’s due diligence on behalf of the Fund is externally verified only if and to the extent misrepresentations are suspected. Thus, i cannot be ruled out completely that false information may remain undetected in certain cases. As the Fund’s investment is made for several years, APEX considers it a priority to establish and maintain a trust within a good working relationship with the portfolio company as a safeguard in light of the limitations described in this section.
Initially, the assessment of how the Fund’s investment in the portfolio company relates to the environmental or social characteristics mentioned above is carried out as part of the due diligence process using a questionnaire. Via the questionnaire, qualitative statements of an environmental or social nature or relating to corporate governance are requested from the portfolio companies and then taken into account in the investment decision-making process. The findings relating to the environmental or social or governance aspects are non-binding and being considered in light of all circumstances including the size of the investment, its strategic importance, its envisaged trajectory as well as the transactional context.
Should APEX on behalf of the Fund determine any potential issues relating the environmental or social characteristics, it will engage the portfolio company’s manager in discussions (e.g. in board meetings) with a view to resolving, reducing or mitigating such effects, provided that such efforts will always remain within a scope considered by APEX in its absolute discretion to be proportionate in light of the size and strategic importance of the respective investment in the portfolio companies and shall take into account the respective bargaining positions and transactional context.
APEX Ventures EuVECA GmbH & Co. KG
The disclosure relating to APEX One Best in Class EuVECA GmbH & Co. KG applies accordingly to APEX Ventures EuVECA GmbH & Co. KG with the exception that the investment strategy of APEX Ventures EuVECA GmbH & Co. KG differs from that of APEX One Best in Class EuVECA GmbH & Co. KG. The investment strategy of APEX Ventures EuVECA GmbH & Co. KG may be summarized as being targeted at early stage investments in DeepTech companies.
APEX Digital Health EuVECA GmbH & Co. KG
The disclosure relating to APEX One Best in Class EuVECA GmbH & Co. KG applies accordingly to APEX Digital Health EuVECA GmbH & Co. KG with the exception that the investment strategy of APEX Digital Health EuVECA GmbH & Co. KG differs from that of APEX One Best in Class EuVECA GmbH & Co. KG. The investment strategy of APEX Digital Health EuVECA GmbH & Co. KG may be summarized as being targeted at early stage investments in medical tech companies.