ESG Charter

THE COMPANY

Seven Capital Management is an independent asset management company approved by the Autorité des Marchés Financiers. Its main activity is collective management through a mutual fund, a SICAV (SEVEN UCITS) comprising diversified absolute return funds and a euro zone equity fund. A discretionary management activity is currently being developed. Seven Capital Management pursues an objective of optimal liquidity at any time by investing only in highly liquid assets, which also includes a sustainability objective.

Seven Capital Management uses an algorithm developed by the company's founders to manage its funds, which takes into account the dynamics and evolution of the global economy, investment vehicles and global risks. Sustainability and the associated risks are at the heart of the evolution of the global economy, which is why the integration of ESG criteria into investment decisions is part of Seven Capital Management's ongoing approach.

COMMITMENTS AND VALUES

Seven Capital Management has a strong entrepreneurial identity, driven by a taste for work and a desire to develop the company, respecting its clients, employees, partners, interlocutors and society as a whole. Thus, beyond the efficiency of the services provided, Seven Capital Management aims to maintain human relations based on the values of loyalty, honesty and transparency.

If the objective of any company is the creation of value, Seven Capital Management is aware that its activity and its decisions can have a significant impact on society. This is why, as a responsible citizen, Seven Capital Management wishes to include the activity of the SEVEN UCITS SICAV in a responsible investment approach.

This translates into the integration of extra-financial criteria (Environment, Social, Governance and External Stakeholders) in the analysis, selection and management processes of all the sub-funds of the SICAV managed by Seven Capital.

In the medium term and with a view to continuous improvement, Seven Capital Management, with the support of EthiFinance as part of its structure as a responsible investor, will study the possibility of joining the United Nations Principles for Responsible Investment.

Finally, as an agent of change, Seven Capital Management will remain attentive to developments in responsible investment practices, in order to meet market expectations.

The present charter details the various elements of the ESG approach and the responsible investment strategy implemented.

ESG APPROACH DEVELOPED FOR THE SICAV

The integration of extra-financial criteria in investment decisions has the following objectives:

Obtaining additional performance over the long term,
Reducing the risks linked to the above-mentioned extra-financial criteria (ESG),
Supporting the most virtuous companies in terms of ESG criteria,
Contributing to the collective effort to promote investment practices that take into account environmental and social impacts and ethical governance,
Matching Seven Capital Management's values and its activity as an asset management company,
Adding meaning to clients' investments,
Reinforcing the reputation and attractiveness of Seven Capital Management as an agent for change.

The ESG approach concerns the entire range of the SEVEN UCITS SICAV and focuses more particularly on the equity and bonds due to the instruments used in the funds, their greater liquidity and the greater flexibility to exclude securities whose issuer does not meet the defined ESG criteria. Seven Capital Management also invests in the money market asset class by holding negotiable debt securities issued exclusively by Germany, Spain, Italy and France.

As regards bonds, Seven Capital Management invests exclusively in instruments issued directly or indirectly by the 50% highest-rated sovereign issuers among sovereigns. As regards equity, Seven Capital Management is developing a sophisticated ESG approach, as described in this charter.

Indeed, the funds of the SEVEN UCITS SICAV invest :

In the equity class through individual shares for the following funds:

Seven European Equity Fund
Seven Diversified Fund
Euro Low Volatility Fund
Seven Fortress Fund

In the bond class only through futures markets on sovereign bonds (Germany, USA, Japan) for the following funds:

Seven Diversified Fund
Euro Low Volatility Fund

Both these funds also invest less than 10% of their assets in sovereign equity indices.

In this context and as part of its ESG approach, Seven Capital Management is committed to respecting environmental, social and governance (ESG) responsibility criteria according to the best-in-class responsible investment approach for corporate issuers and best-in-universe for sovereign issuers, based on :

Identification and monitoring of controversies that may be faced by companies in the investment universe. Each identified controversy is rated on a scale of 1 (mild controversy) to 5 (severe controversy) and issuers with a controversy rating of 5 will be de facto excluded from the eligible universe.
ESG assessment of issuers on environmental, social, governance and external stakeholder issues. The degree of maturity of issuers in addressing the ESG issues to which they are exposed is assessed and results in a score out of 100.
A "best-in-class" investment strategy. In order to maintain a certain representativeness and variety of sectors within its investment portfolio, Seven Capital applies the best-in-class principle and undertakes to exclude from its investment universe the 20% of securities with the lowest ratings, by sector of activity, on all ESG criteria.
A "best-in-universe" strategy. For the sovereign bond portfolio, Seven Capital applies the best-in-universe principle and undertakes to select only the top 50% of the sovereign universe.
In addition, and in order to guard against any ESG risk relating to issuers that are not rated, Seven Capital Management systematically excludes issuers (companies and governments) that are not ESG-rated.

Seven Capital Management uses the extra-financial ratings of Inrate and GAIA Research to update the list of stocks in the investment universe of its SICAV fund on 1st January and 1st July of each year. This updating frequency allows the portfolio to be less exposed to issuers that are subject to severe controversy or whose ESG rating would lead to their exclusion.

In order to guarantee transparency of the ESG approach to its partners, Seven Capital Management undertakes to provide a half-yearly report containing an overview of the SICAV's ESG performance, which follows the update frequency of its portfolio. In addition, this charter will be published on the management company's website.

INTERNAL ORGANISATION TO SUPPORT THE ESG APPROACH

Seven Capital Management ensures that its employees are aware of this charter and sign it personally and individually, and that the investment director is appointed as the internal ESG referent.

The latter is responsible for ensuring that the above-mentioned selection and exclusion criteria are applied and that the securities in the portfolio are updated every six months in accordance with the extra-financial criteria.

Finally, the ESG referent ensures that transparency with stakeholders is guaranteed by means of reports and the publication of the charter on the website, as well as by mentioning the extra-financial criteria, the sustainability risks and their consideration by Seven Capital Management in the commercial documents, prospectuses and DICI.

Paris, 31st March 2021

Johann Schwimann
President

Renaud Labbé
General Director