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SFDR Disclosures

Ilanga II SARL and Ilanga Investments II S.C.A.


12/03/2024

Ilanga II SARL (the "AIFM"), a Luxembourg-based registered alternative investment fund manager within the meaning of article 3(2)(b) of Directive 2011/61/EU of 8 June 2011 on alternative investment fund managers ("AIFMD"), makes the following disclosures for the purposes of Regulation (EU) 2019/2088 of 27 November 2019 on sustainability‐related disclosures in the financial services sector ("SFDR") and Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment (the "Taxonomy Regulation").

The AIFM acts as registered alternative investment fund manager of Ilanga Investments II S.C.A. (the "Fund").

The Fund is classified under article 6 of the SFDR, as its investments do not take into account the EU criteria for environmentally sustainable economic activities.

AIFM-related disclosures

  1. Transparency of sustainability risk policies and transparency of the integration of sustainability risks – SFDR article 3(1)

General overview

Sustainability risks are defined in SFDR as environmental, social or governance ("ESG") events which if they occur could cause an actual or a potential negative impact on the value of the Fund's investments (sustainability risks are referred to herein as "ESG risks").

Sustainability due diligences may be conducted on an ad hoc basis for the Fund before making an investment to assess potential ESG risks, the status of regulatory compliance, determine the potential for positive contribution to social and/or environmental issues and set up the management structures to measure, report and verify performance. There can be no assurance, however, that such due diligence will reveal all ESG risks or sustainability liabilities relating to an investment that could emerge from adverse impact or from the failure to perform and positively contribute to environmental or social issues.

Relevance of sustainability risks

Based on the Fund’s investment objective and investment strategy, the AIFM considers that ESG risks will have a limited impact on the returns of the Fund.

  1. No consideration of adverse impacts of investment decisions on sustainability factors – SFDR article 4(1)(b)

Article 4(1) of the SFDR requires fund managers, such as the AIFM, to provide a clear statement as to whether or not they consider the "principal adverse impacts" of investment decisions on sustainability factors, i.e. environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. In case a fund manager does not consider such principal adverse impacts, article 4(1)(b) of the SFDR requires it to include clear reasons for why it does not do so, including, where relevant, information as to whether and when it intends to consider such adverse impacts.

Although ESG and sustainability risks are important to the AIFM, the latter does not consider the adverse impacts of investment decisions on sustainability factors in the manner prescribed by article 4(1) of the SFDR, in particular due to the fact that (i) no reliable and sufficiently available or accessible data are available to perform such impact measurement and provide the mandatory reporting imposed by the regulatory technical standards in a consistent manner; (ii) the investment strategy and objectives of the Fund and thus its overall portfolio are neither ESG-focused nor, in the opinion of the AIFM, likely to have an impact on sustainability factors; and (iii) the underlying investments are not generally required to, and may not currently, report on such factors.

The AIFM does not intend to consider principal adverse impacts of investment decisions on sustainability factors in the near future.