Responsible Investment Policy

As an asset manager and an institutional investor, Moonfare recognises that ESG (as defined above) aspects can be important drivers of investment value as well as a source of investment risk. As such, Moonfare integrates RI considerations throughout its investment process. By identifying and assessing ESG issues as part of its investment processes and ensuring that these are managed over the investment lifetime, Moonfare seeks to support the creation of more sustainable businesses over the long-term. In turn, Moonfare believes that this will generate improved long-term, risk-adjusted returns for its clients.

Moonfare has taken significant steps in embracing RI. In 2021, the Firm became a signatory to the United Nations Principles for Responsible Investment (“UNPRI”). The Firm has also developed a RI Policy and appointed Sanjay Gupta, Chief Investment Officer (“CIO”), to oversee RI throughout the Firm. Moreover, Moonfare has designated a dedicated investment team member focused specifically on RIand ESG matters, ensuring a proactive approach to RI practices.

The Firm is committed to continuous improvement and evolution in its approach to RI. Moonfare conducts annual reviews of its RI Policy and consistently seeks ways to enhance its internal systems and processes to be in line with ESG-positive considerations.

Moonfare also aims to be a thought leader in the field of RI by actively participating in industry initiatives related to ESG and impact investing. This includes engaging in workgroups, contributing to panels, and organising and participating in industry events. Additionally, the Firm shares its insights through various means, such as blog posts, white papers, and video content centred around RI topics.

This RI Policy is informed by Moonfare’s commitment to the UNPRI’s six guiding principles (the “Principles”) presented below:

•  Principle 1: Incorporating ESG issues into investment analysis and decision-making     processes.
•  Principle 2: Being active owners and incorporating ESG issues into ownership     policies and practices.
•  Principle 3: Seeking appropriate disclosure on ESG issues by the entities in which     investments are completed.
•  Principle 4: Promoting acceptance and implementation of the Principles within the     investment industry.
•  Principle 5: Working together to enhance effectiveness in implementing the     Principles.
•  Principle 6: Reporting on activities and progress towards implementing the     Principles.

In terms of invested capital, most of Moonfare’s investment activity relates to making primary commitments into private markets funds. As such, Moonfare is not directly involved in the operations and management of the underlying portfolio companies that it invests in. To make an informed investment decision and fulfil its fiduciary duty to investors, Moonfare must have full confidence in the reliability and persistence of the General Partners’ RIand/or ESG policies and their obligation to fulfil them. For this reason, Moonfare factors ESG considerations into its due diligence and decision-making processes for all its investments (primary commitments, co-investments and secondaries), as described below.
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Primary commitments
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The Moonfare investment team has developed its own proprietary ESG Scorecard, which is used to conduct in-depth assessments of GPs’ ESG programs based on quantitative and qualitative data. The scoring process is based on six key dimensions, namely:

•  Organization & Governance Structure,
•  ESG Policy Status,
•  CESG Process and Implementation,
•  ESG Reporting,
•  Diversity, Equity, and Inclusion (“DE&I”),
•  Investment Strategy.

Each GP is assigned an overarching ESG score ranging from 1 (best) to 5 (worst) as well as scores for each separate dimension, enabling easy comparison and ongoing monitoring of their current status and progress over time. Moonfare’s evaluation also includes a review of GPs’ existing ESG Policies and UNPRI Transparency Reports, if available. This evaluation process is further supplemented by extensive meetings, reference calls, and comprehensive legal and operational due diligence.

The Moonfare investment team always includes a summary of their findings on RI and ESG within its due diligence report. Subsequently, the Investment Committee thoroughly reviews and approves the ESG due diligence findings for each primary commitment. It is important to note that the Investment Committee has the authority to decline an investment opportunity based on ESG grounds if deemed necessary.

Co-investments

Regarding co-investments, Moonfare’s deal teams conduct ESG assessments at both the GP and asset level. The latter includes leveraging the ESG diligence that the GP has already conducted, as well as performing additional diligence on the co-investment opportunity. In many instances, the Moonfare team can also leverage the ESG diligence conducted from its primary commitments. This process follows Moonfare’s proprietary diligence procedures, which include a thorough evaluation of ESG considerations.

Just like the primary investment approval process, the Investment Committee has the authority to reject an investment opportunity based on RI principles.

As Moonfare co-invests alongside GPs and therefore does not actively manage portfolio companies, the Firm’s commitment to ESG principles in its co-investment process is primarily limited to the deal analysis and selection, while relying on GPs to lead and manage further asset-level ESG improvements during the holding period.‍

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Secondary Investments

While Moonfare aims to conduct ESG due diligence on secondary investments with the same level of depth as it applies to co-investments, the Moonfare team acknowledges that the information provided by secondary sellers might be limited. In such cases, to conduct its ESG diligence, Moonfare may need to rely on desktop research, publicly available information, and data provided by intermediaries. Despite these limitations, Moonfare is committed to conducting thorough due diligence to assess the ESG risks and opportunities associated with its secondary investments. Just like the primary and co-investments approval process, the Investment Committee has the authority to reject an investment opportunity based on RI principles. By leveraging all available resources, Moonfare aims to make informed decisions that align with its ESG objectives and values.

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Anti-Money Laundering (“AML”) & Counter Terrorism Financing (“CFT”)

For all its investments, Moonfare conducts an upstream AML analysis as part of its due diligence process. This analysis is designed to identify and assess any AML risks associated with the targeted primary commitment, co-investment or secondary opportunity. The resulting aggregate rating (Low/Medium/High risk) is then presented to the Investment Committee. If required, Moonfare’s Compliance Team further investigates the findings and reports to the Moonfare Audit Committee and Risk Acceptance Committee. These committees play a crucial role in making the final investment decision based on AML considerations.

• Moonfare’s approach to incorporating ESG principles in its investment processes primarily focuses on fund and deal selection, as the Firm does not actively engage with portfolio companies directly. To achieve this, Moonfare employs both inclusion (positive screening) and exclusion (negative screening) criteria during its decision-making process, always with the overarching goal of investing in funds and companies not only to generate sound financial returns, but also positive sustainability outcomes benefitting the environment, society and future generations.
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  Exclusion Criteria:
• Moonfare refrains from investing in funds and companies that allocate a significant portion of committed capitalor primarily operate in industries violating the following criteria regarding business areas or practices:
• •  Tobacco
  •  Gas and oil exploitation
  •  Weapons and firearms
  •  Gambling
  ‍•  Addictive substances
  •  Pornography
  •  Coal mining
  •  Factory farming

• Additionally, Moonfare avoids investing in companies and funds whose portfolio companies engage in any of the following business practices:

• • •  Human rights abuses
    
    • •  Violations of labour and pension rights
      
      
      Inclusion Criteria:
    • On the other hand, Moonfare actively invests in companies and funds whose portfolio companies incorporate positive ESG (as defined above) aspects throughout their value chain, as discussed below.
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      Environmental Factors
    • Moonfare will prioritize investments in funds and companies that demonstrate a commitment to sustainable practices, such as energy efficiency, renewable energy sources, waste reduction, and sustainable supply chain management. Additionally, Moonfare will take into account the potential effects of climate change on the long-term viability of investments. This includes evaluating how companies are adapting to a changing climate, their resilience to extreme weather events, and their efforts to mitigate their carbon footprint. By incorporating considerations around climate change into its investment decisions, Moonfare aims to contribute to a more sustainable and resilient economy for future generations.

• All the positive and negative screening factors mentioned above are key to Moonfare’s investment approach, as the ultimate focus is on ensuring that the company’s investments generate not only sound financial returns, but also positive sustainability outcomes benefitting the environment, society and future generations.
• In particular, Moonfare supports opportunities that foster:
• • Environmental sustainability: Moonfare prioritizes investments in companies that    demonstrate a commitment to reducing their environmental impact, including    through sustainable resource management, energy efficiency, waste reduction, and    carbon footprint reduction.
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  • Social impact: Moonfare seeks investments in companies that contribute positively    to society, including through job creation, community engagement, diversity and    inclusion, and support for marginalized populations.
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  • Long-term value creation: Moonfare prioritizes investments in companies that have    a clear strategy for long-term value creation, considering both financial    performance and non-financial factors such as environmental and social impact.
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  • Innovation and resilience: Moonfare supports investments in companies that    demonstrate innovation and resilience in the face of environmental, social, and    economic challenges, positioning them for long-term success and sustainability.
  

• Moonfare recognizes its responsibility to advocate for greater adoption of RI practices from General Partners, and across the investment holding period from due diligence to ownership engagement, monitoring and reporting. To fulfill this responsibility, Moonfare actively engages with GPs to advocate for and support improvements in their RI processes. The Firm also collaborates with General Partners to advocate for the integration of material ESG issues into their value creation plans.
• Furthermore, Moonfare actively encourages GPs to adopt RI policies and become signatories to the UNPRI. This proactive approach aims to drive positive change and raise the standards of RI practices within the industry.
• As part of its ongoing commitment to RI, Moonfare conducts regular monitoring and stewardship efforts for all its investments. This involves assessing and discussing the incorporation of ESG factors. These efforts are carried out periodically throughout the holding period following the initial investment, ensuring a continuous focus on RI principles throughout the investment lifecycle.
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  Guidelines on Political Engagement
• With regards to political engagement in the context of its stewardship activities, Moonfare prioritizes transparency, integrity, and accountability in its interactions with policymakers and government entities, committing to responsible and ethical engagements only. In particular:
• • Transparency: Moonfare will disclose its political engagement activities, including    any contributions, lobbying efforts, and interactions with policymakers, in a    transparent and timely manner to stakeholders.
• • Integrity and ethics: Moonfare will conduct all political engagement activities with    the highest standards of integrity and ethics, avoiding any actions that may    compromise its values or reputation.
• • Accountability: Moonfare will hold itself accountable for its political engagement    activities, ensuring that they align with the company's values, mission, and    responsible investment objectives.
• • Non-partisanship: Moonfare will engage with policymakers and government entities    in a non-partisan manner, focusing on issues that are relevant to its business and    stakeholders rather than political affiliations.

As a signatory to the UNPRI since 2021, Moonfare is committed to the related required annual reporting effort. This underscores the Firm’s commitment to the Principles, as it upholds the value of transparency by disclosing its RI activities and evaluating the implementation of its ESG program using objective indicators.

As a UNPRI signatory, Moonfare will make its Transparency Report publicly accessible on the UNPRI website beginning with the 2024 reporting cycle.

In addition to external reporting, Moonfare ensures regular internal communication by providing yearly updates on corporate ESG advancements to its shareholders. This practice ensures that the Firm’s commitment to RI practices remains at the forefront of its strategic decision-making processes.

• Moonfare has appointed Sanjay Gupta, CIO, as senior member of the Firm responsible for oversight over and accountability for RI. Moreover, Moonfare has designated a dedicated investment team member focused specifically on RI and ESG matters, ensuring a proactive approach to RI practices. Together, they are responsible for:
• •  The design and implementation of the RI Policy.
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  •  Regularly educating Moonfare’s employees about its RI Policy and ensuring Firm-     wide dissemination.
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  •  Overseeing, tracking and reporting of the appropriate application of ESG principles     within the investment decision process.
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  •  Ensuring that annual training on RI matters is provided to relevant Moonfare     employees such that team members are sufficiently skilled to implement the RI     Policy in their respective functional areas.
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  •  Compliance with the UNPRI and appropriate reporting.
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  •  Corporate ESG initiatives.

In order to uphold the integrity and credibility of its responsible investment activities, all employees are required to disclose any potential conflicts of interest that may arise in the course of their work. Employees should maintain independence and objectivity in their decision-making processes, and promptly disclose any conflicts that may arise to the appropriate compliance officer. Employees are expected to take proactive steps to mitigate conflicts of interest, including recusing themselves from decision-making processes where a conflict exists, seeking guidance from compliance officers, and establishing clear procedures for managing conflicts.

• Moonfare is deeply committed to incorporating ESG factors throughout its operational decision-making and internal policies. This dedication extends to reviewing and adapting Moonfare’s governance structures as the Firm continues to grow. Additionally, the Firm focuses on enhancing employee well-being and retention by implementing comprehensive training programs and attractive benefits.
• In 2020, Moonfare took a significant step in fostering Diversity, Equity, and Inclusion by establishing a dedicated DE&I Committee. This Committee is responsible for overseeing and spearheading specific initiatives to promote DE&I across the entire organization, including organizing experts’ sessions on an annual basis to encourage dialogue on pivotal themes while empowering its employees to contribute their perspectives.
• Recognizing the importance of environmental responsibility, Moonfare has placed particular emphasis on measures and initiatives to reduce its carbon footprint. Currently, these efforts primarily target travel-related emissions, including transportation and accommodations. However, Moonfare is actively exploring opportunities to expand its carbon footprint accounting and offsetting initiatives to also include elements such as waste, energy, and water usage efficiency. Some measures related to these elements are already integrated into Moonfare’s offices and employees are driven and encouraged to follow sustainable practices daily. To facilitate accurate accounting and offsetting of travel-related emissions, Moonfare collaborates with a specialized third-party firm, namely GreenPerk (part of Travelperk). In line with its future carbon footprint reduction goals, the Firm plans to engage with similar specialists for broader carbon footprint-related efforts. This approach reflects Moonfare's genuine commitment to responsible and sustainable practices across all aspects of its operations.
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• This RI Policy will be reviewed annually and updated as necessary by Moonfare’s senior leadership team.