Regulatory informations

Conflict of Interest Management Policy

In accordance with the provisions of Article 318-13 of the General Regulations of the Autorité des Marchés Financiers, Inovalis has established a conflict of interest management policy setting out its approach to identifying, preventing and managing conflicts of interest that may arise in the course of its activities.

Prevention :

Inovalis has proactively implemented internal procedures aimed at preventing the occurrence of conflicts of interest. These procedures establish ethical principles applicable to all employees.

Identification :

Conflicts of interest may arise between:

• Inovalis, including its directors, employees or any person directly or indirectly linked to Inovalis through a control relationship, and the AIF under management;
• the AIF or its investors and another client of the manager;
• two clients of Inovalis.

In order to identify such situations, the management company has developed a conflict of interest mapping document, which catalogues typical conflict of interest scenarios that could potentially be detrimental to one or more clients.

The identification of potential conflicts of interest enables Inovalis to implement preventive measures to avoid their occurrence, as well as management measures to frame them.

Management of Conflicts of Interest :

In certain complex or specific situations, where the procedures and arrangements implemented upstream are not sufficient to ensure with reasonable certainty that the potential conflict will not harm the interests of one of its clients, Inovalis implements a conflict of interest management procedure based on transparency in its dealings with clients. Where appropriate, the management company clearly informs clients, prior to acting on their behalf, of the general nature or source of the conflict of interest.

For further information, the conflict of interest management policy is available free of charge and upon simple request from Inovalis.

Complaints Handling Policy

In accordance with the provisions of Article 318-10 of the General Regulations of the Autorité des Marchés Financiers, Inovalis has established a framework including a complaints handling policy.

Definition:

A complaint is a statement recording the dissatisfaction of an existing or potential client towards INOVALIS, regardless of the contact through whom it is expressed.

It may be submitted by any person with a legitimate interest, including in the absence of a contractual relationship with the firm.

It is not necessary, for a statement to be treated as a complaint, that it be accompanied by a request to exercise a right, obtain a service, remedy an error or cease a harm. A request for information, opinion, clarification, service or provision is not a complaint.

How to Submit a Complaint

Complaints may be addressed to INOVALIS:

• By post: 52 rue de Bassano, 75008 Paris
• By email: reclamations@inovalis.com
• By phone: 01.56.43.33.23

Complaints must be submitted in French or English. The complaints handling service is free of charge.

Complaint Processing Time

INOVALIS will acknowledge receipt of your complaint within a maximum of 10 business days from the date of submission, unless a response is provided to the client within that timeframe.

A response will be sent to you within a maximum period of 2 months from the date of submission of your complaint. If additional investigation is required beyond this period, INOVALIS undertakes to inform you of the progress of your complaint upon expiry of the deadline.

Recourse to the Mediator

If the response received is unsatisfactory, or in the absence of a response within 2 months (except in the exceptional circumstances referred to above), you may contact the Mediator of the Autorité des marchés financiers free of charge:

• By post:

Mr. Rémi Bouchez

Mediator of the AMF

Autorité des marchés financiers

17 place de la Bourse

75082 Paris Cedex 02

• By email: Mediation request form available on the website www.amf-france.org

We hereby inform you of the existence of a mediation charter, drawn up by the Autorité des marchés financiers, which can be found on the website www.amf-france.org on the AMF Mediator page.

Sustainability risk

CONSIDERATION OF THE NEGATIVE IMPACTS OF SUSTAINABILITY INVESTMENTS

Sustainability investment risks may either represent a risk in their own right or impact on other risks and consequently contribute significantly to risks such as market risks, operational risks, liquidity risks or counterparty risks. Sustainability risks may affect long-term risk-adjusted returns to investors. The assessment of sustainability risks is complex and may be based on hard-to-obtain and incomplete environmental data, considered outdated or otherwise materially inaccurate. Even when identified, there is no guarantee that such data will be correctly assessed.

With regard to climate, the management company has identified two types of risk borne by issuers: physical risks resulting from damage directly caused by meteorological phenomena and transition risks related to the effects of the implementation of a low-carbon economic model: legal, regulatory and political developments, changes in supply and demand, technological innovations and disruptions, and the perception by customers and stakeholders of the contribution to the transition.

Biodiversity-related risks are not assessed due to a lack of data and established methodology. The management company has analysed that in the short and medium term it is mainly the transition risks that could affect investors. If, however, the temperature rise were to be significant, the physical risks would become predominant. Transition risks related to the market or technology market or technology related transition risks are latent but could materialise very quickly.

The characteristics of sustainability risks are often difficult to reconcile with standard investment processes that are based on the The characteristics of sustainability risks are often difficult to reconcile with standard investment processes that are based on probabilities derived from the past. The management company The management company measures these risks for all portfolios and incorporates them into investment The management company measures these risks for all portfolios and incorporates them into investment decisions on an ad hoc basis according to its assessment of the occurrence of the risk.

With regard to sustainability risk management, the following risks have been identified:

i) Regulatory and legal risks for investments that do not comply with the investment policy or applicable legislation (country of location of assets);
ii) Liability claims for negative impact of the assets on human health (tenants, neighbours, municipality…) with possible impact on the profitability of the investment and risk regarding the liability of the management company;
iii) Orders to carry out upgrading work (environmental standards) on the assets (impact on the profitability of the investment) (impact on the profitability of the investment and possible risk concerning the liability of the management company);
iv) Prohibition to rent non-compliant assets (impact on the profitability of the investment; (impact on the profitability of the investment; possible risk concerning the liability of the management company).

The management company integrates ESG risk factors into its analysis. It does not have a specific It does not have a specific objective in this area.

ESG POLICY

Inovalis’ ESG policy is based on 3 pillars: Environmental Impact, Social Impact and Organisational Impact. Through a materiality analysis, the Group has identified its five major challenges: carbon sobriety, energy, communication & the effectiveness of social dialogue, stakeholder engagement and the integration of CSR issues into our Group strategy. Although the funds’ investment strategy does not formally take ESG criteria into account, Inovalis nevertheless assesses ESG risks in the management of its current portfolio. In particular, Inovalis carries out ESG analyses to assess the performance of its assets under management and studies their potential for improvement, particularly in the areas of energy and carbon. The Group ensures that the portfolio complies with environmental regulations such as the tertiary sector decree, the BACS decree, etc.

Information on the extra-financial management practices of the funds is presented in the 29 LEC report.

REMUNERATION POLICY

The scope retained by the management company of the regulatory criteria for the definition of its policy determines the determination of the persons identified and the application of the proportionality principle.

The general obligation to have sound remuneration policies and practices applies to all management companies, regardless of their size or systemic importance. systemic importance.

Having regard to its size, internal organisation, nature, scope and complexity of activities and categories of staff, the the nature, scope and complexity of the activities and the categories of its staff, the management company shall apply the principle of proportionality1 with regard to appropriate to its level of risk.

The remuneration policy covers all aspects of remuneration including fixed components, variable components, variable components, retirement conditions and other similar specific benefits. similar specific benefits.

The long-term strategy of the management company takes into account the overall business strategy The long-term strategy of the management company takes into account the overall business strategy and quantified risk tolerance levels on a multi-year basis through the alignment of the remuneration policy with its interests and the interests of the AIFs under management and their investors and their investors, the prevention of excessive risk-taking and the risk-adjustment of the variable remuneration.

Severance packages that allow for the payment of significant amounts to identified individuals leaving the AIF in accordance with performance and risk of significant amounts to identified individuals who leave the management company are correlated with the performance over time and, in particular, the failure of the identified individuals concerned to achieve their objectives. objectives by the identified persons concerned.

These payments are set and approved in accordance with the governance structure to ensure that failure is not rewarded.

The fixed remuneration remunerates professional services rendered, in accordance with the level of education, hierarchical rank, level of expertise and skills required, difficulties and professional experience, as well as the relevant business sector and region.

The fixed remuneration is based on the definition of the objectives of the management company, the relevant business unit or the relevant managed AIF. It takes into account both the current and future risks taken by the employees, the business unit, the relevant AIF or the management company as a whole.

Variable remuneration includes predetermined risk and performance parameters2 . performance2 :

• Of the AIF under management
• Of the management company as a business unit
• The individual activities of the identified person

These parameters are weighted for each person concerned according to:

• The level of decisions taken
• The achievement of objectives (the objectives assigned must be achievable)
• Measures over which the person has some direct influence

In line with its sustainability risk management, the management company integrates ESG risk factors into its analysis. ESG risk factors in its analysis. It does not have a specific target in this respect.

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1 Esma guidelines n°2013-232, version of 30-1-2014, point 20
2 ESMA guidelines no. 2013-232, version of 30-1-2014, point 101