Sustainability at Infinigon Capital

1. Portfolio Management

1.1. Strategies for dealing with sustainability risks

Sustainability concept

In general: We provide our services as initiator and investment manager of investment funds that are set up and administered by various asset management companies based in Germany.

Our current investment and business model involves investing in investment funds managed by managers specializing in these investments. These managers are carefully selected by Infinigon. Therefore, Infinigon does not currently directly consider sustainability risks at the CLO and target fund level in its portfolio management. This means that, as part of our investments in CLOs/target funds, we do not examine the individual corporate loans held within the CLO/target fund for potential sustainability risks and base our investment decisions on them. Sustainability risks are indirectly considered through our selection of CLO/target fund managers, in accordance with our sustainability risk management strategies. For this purpose, we have a process that assesses the sustainability risk processes of the CLO/target fund managers and takes into account any existing sustainability risk considerations.

Strategies for incorporating sustainability risks into investment decision-making processes

Negative environmental conditions, social problems, or poor corporate governance can have multiple negative impacts on the value of our clients’ investments and assets. These so-called sustainability risks can have a direct impact on the asset, financial, and earnings position, as well as the reputation of the investments. Since such risks cannot ultimately be completely eliminated, we have developed specific strategies and processes for our portfolio management services to identify and mitigate sustainability risks.

To limit sustainability risks, when investing in CLOs/target funds we try to underweight or completely exclude managers who have an increased risk potential.

Infinigon GmbH’s current sustainability concept includes not only exclusion criteria but also suitable sustainability filters, such as the inquiry into and assessment of sustainability processes. These form the basis for conducting an evaluation during due diligence discussions and questionnaires with the CLO/loan managers in whose CLOs/target funds we may invest.

Objective: We are increasingly selecting CLO and target fund managers who employ specific processes when choosing their investments in the CLOs/target funds to meet and adhere to corporate, social, ethical, and environmental criteria, thereby eliminating or minimizing associated sustainability risks. Selecting these CLO/target fund managers indirectly addresses sustainability risks. Currently, the CLO/target fund managers in whom we invest, as well as their investments in the CLOs/target funds, are only inadequately recorded in ESG database providers, which currently precludes quantitative analysis, for example, through positive lists.

1.2. No consideration of negative impacts of investment decisions on sustainability factors.

In our investment decisions, the significant adverse impacts on sustainability factors are only indirectly considered. We do not directly consider the most significant adverse impacts on sustainability factors of investment decisions made by the CLO/target fund managers. Investment decisions can have adverse effects on the environment (e.g., climate, water, biodiversity), on social and labor issues, and can also be detrimental to the fight against corruption and bribery. However, with our investments, we do not invest in companies themselves. We invest in CLOs/target funds (for clarification: a CLO consists of bundled securitizations of senior secured loans from many different sectors, distributed across various tranches). The target funds we select invest in a broad universe of secured corporate loans.

However, Infinigon surveys and evaluates the processes of CLO/target fund managers regarding the consideration of the most significant adverse impacts of investment decisions on sustainability factors, in order to be able to take these into account in investment decisions.

Currently, possibilities for implementing sustainability criteria are being reviewed jointly with the asset management companies with the aim of implementing them as sustainable criteria.

2. Investment advice

Should investment advice be provided, the consideration of sustainability risks and the consideration of the most significant adverse effects of investment decisions on sustainability factors will be guided by the mandate and the framework conditions.

3. Remuneration policy in connection with the consideration of sustainability risks

Infinigon’s compensation policy is consistent with the exclusion of sustainability risks. Infinigon’s compensation policy is designed in such a way that it provides no incentive to take disproportionate risks, including sustainability risks.

4. Corporate sustainability issues

The management of Infinigon GmbH has been considering sustainability in its business and strategic decisions for many years. Alongside our pursuit of long-term business success, we aim to create value for our customers, business partners, and employees, while simultaneously assuming social responsibility.

Even though we are among the highly specialized asset management boutiques, we make a positive contribution to reducing CO2 emissions. We focus on emissions directly caused by our business activities, such as those from direct energy consumption in buildings (heating, electricity) or from the consumption of materials (paper, printer cartridges, etc.). We also consider emissions that arise indirectly from business activities from sources not directly attributable to the company, such as air travel, train journeys, or the use of cars/rental cars by our employees for business trips.

The following measures have been in place at Infinigon for years.

For employees who regularly undertake business trips or commutes, we offer the most suitable BahnCard to reduce CO2 emissions.

Infinigon introduced a cloud solution in fiscal year 2020, thereby creating the possibility of a hybrid office structure. This enabled CO2 emissions to be reduced by:

  • Work materials such as paper, printer cartridges
  • Commutes
  • Office space will be reduced. IT and other electrical equipment will be disposed of through reuse if it is still functional. Overall, every effort is made to repurpose usable items. Data exchange with our tax advisor, bank, and external auditors is primarily digital.

In portfolio management and research, processes are largely digitalized. In trading, however, there are still requirements for the physical storage of trading documents. Here, paper consumption cannot yet be further reduced. Our printers are generally set to black and white and double-sided printing.
Digitizing the office allows us to work more flexibly and productively. Our employees spend less time sifting through files and can concentrate on essential tasks. They require less space and materials. Furthermore, the existing digitization of the office facilitated the pandemic-related transition to a hybrid office structure in 2020 more quickly and easily than in a traditionally organized office.

All employees are free to work from home, subject to operational requirements. As an alternative to travel, almost all meetings are held via video call. This also offers potential for continued sustainable and cost-effective business practices in the future.
When purchasing new equipment, we pay attention to energy certifications. We minimize smaller, inefficient orders. Water consumption in the office has also been reduced through efficient equipment and raising user awareness.

This year we intend to also quantitatively record CO2 emissions in order to plan suitable measures for further reduction and possible offsetting.