Responsible Investment

Our Commitment

Capital Dynamics has a long-standing commitment to corporate responsibility; it is deep-rooted in the firm's DNA. In recognition of the importance of Responsible Investment, each of the firm's business lines (Private Equity and Clean Energy) integrates the United Nations-supported Principles for Responsible Investment ("PRI"), the United Nations Sustainable Development Goals ("SDGs") and other Responsible Investment factors throughout the investment appraisal, due diligence, decision-making and post-investment monitoring process. Moreover, the firm's proprietary R-Eye™ Rating System has furthered the level of transparency offered to clients. 

It is core to our fundamental belief that strong Responsible Investment practices enhance long-term value creation for our clients. Capital Dynamics defines Responsible Investment evaluation as a process of the identification of potentially material sustainability opportunities and/or risks that could positively or negatively affect an investment made by any business line of our private assets platform. 

Our Approach

We believe Responsible Investment leads to enhanced long-term financial returns and a closer alignment of objectives among investors, stakeholders, and society at large.

We believe the benefits of Responsible Investment include:

•        Risk Reduction

•        Cost Reduction

•        Positive impact on operating performance

We integrate Responsible Investment practices across our organization. In addition to being an early signatory of the Principles for Responsible Investment (‘PRI’) in 2008, our company is actively engaged in initiatives to improve responsible investment industry standards.

In 2025, Capital Dynamics was awarded top scores in all investment strategies and modules*:

•        Private Equity: 5 Stars (94 points)

•        Confidence Building Measures: 5 Stars (100 points)

•        Clean Energy: 5 Stars (99 points)

•        Policy, Governance, Strategy:  5 Stars (99 points)

 _{*The third-party ratings shown were received by Capital Dynamics in the year indicated, based on activities undertaken in the prior calendar year. Capital Dynamics did not provide any direct compensation in connection with obtaining such third-party ratings, although in certain cases we have paid a fee to become members of an organization, which membership is a precondition to obtaining a rating,or have paid a fee in order to use the issuing organization’s logo in our marketing materials.}

Our proprietary investment rating system: R-EYE™

Based on the 17 Sustainable Development Goals (“SDGs”) identified by the UN, we created the R-Eye™ rating system in 2018, and deployed it across our business lines the following year. The proprietary rating system makes use of ten to twelve Responsible Investment criteria^*, depending on the investment strategy, which are included in a scorecard and the Responsible Investment evaluation process. By scoring a potential investment against these criteria, we can make an informed decision whether to proceed with the due diligence or refer it to our Responsible Investment Committee for further review prior to the final investment decision. After an investment is made, this R-Eye™ rating is actively monitored and updated during the holding period of an investment. Any change in the rating is reported to our investors and protocols are in place to respond quickly and thoughtfully where any material Responsible Investment issues are identified.

^[1]Capital Dynamics – in-house illustration. The R-Eye™ scorecard for each strategy will vary. Only investments beginning in 2019 are evaluated based on the R-Eye™ framework. Specific investment processes may vary depending on investment vehicle and asset class.

*For a detailed breakdown of the Responsible Investment criteria used for each business line, please refer to our Responsible Investment policy here.

Public disclosure under Regulation (EU) 2024/3005 on ESG rating activities

This disclosure is made for the purposes of Annex III, point 1 of Regulation (EU) 2024/3005 of the European Parliament and of the Council of 27 November 2024 on the transparency and integrity of Environmental, Social and Governance rating activities, and amending Regulations (EU) 2019/2088 and (EU) 2023/2859.

Capital Dynamics Group (“Capital Dynamics”) is an independent asset management firm focused on private assets and comprises Capital Dynamics Holding AG and its affiliates.

Capital Dynamics uses its proprietary R-Eye™ rating system to assess responsible investment (“RI”) matters across its private assets platform. The system is designed to provide an analytical and repeatable framework for assessing RI considerations across Capital Dynamics’ business lines and strategies, including Private Equity, Secondaries, Direct Investments and Clean Energy. Given the differences between direct and indirect private assets strategies, R-Eye™ is applied through business line and strategy-specific scorecards rather than a single uniform scorecard.

R-Eye™ is an aggregated RI rating covering environmental, social and governance factors. It is intended primarily to assess sustainability risks, RI opportunities and financially material RI factors, while also considering environmental and social impacts where relevant, particularly in Clean Energy. It is not utilised as a formal double-materiality rating.

The R-Eye™ framework incorporates the United Nations-supported Principles for Responsible Investment, the UN Sustainable Development Goals and other RI factors into investment appraisal, due diligence, decision-making and post-investment monitoring. The topics assessed vary by strategy and may include, as applicable, environmental matters such as climate change, energy efficiency, recycling, resource efficiency, pollution monitoring, water, biodiversity, land use and local habitat; social matters such as labour standards, diversity and inclusion, health and safety, community engagement, human rights and local employment; and governance matters such as RI policies, systems and resources, due diligence integration, ownership-stage integration, reporting, decision-making, legal compliance and business integrity. These topics are broadly capable of being mapped to European Sustainability Reporting Standards (“ESRS”) topical areas, although a formal ESRS mapping exercise has not been carried out.

R-Eye™ is an aggregated ESG rating, but Capital Dynamics does not currently apply a single fixed weighting of environmental, social and governance factors across all R-Eye™ assessments. Instead, R-Eye™ scores are determined using proprietary business line and strategy-specific scorecards, which assess the RI criteria considered relevant to the applicable investment type, strategy and available information. The overall R-Eye™ score reflects the outcome of the applicable scorecard assessment, subject to internal review and oversight. Where product-level targets refer to minimum total R-Eye™ scores or minimum environmental, social and governance subcategory scores, those thresholds are disclosed in the relevant product documentation.

Each investment, manager or asset is scored, as applicable, on an absolute 0–5 scale, with 0 representing the weakest RI profile and 5 representing the strongest RI profile. The R-Eye™ rating is expressed as an absolute score and is not intended to represent a relative ranking against peers or a market benchmark. The analysis is both backward-looking and forward-looking: it considers information available at appraisal and due diligence, while also assessing whether identified RI issues can be addressed at investment, during ownership or within a reasonable post-investment period. R-Eye™ scores are generally reviewed at least annually for relevant private assets investments and reported quarterly.

Where environmental factors are assessed, the methodology takes into account relevant climate objectives. For Clean Energy, this includes the Paris Agreement, climate change mitigation and decarbonisation of the real economy. Where social and governance factors are assessed, Capital Dynamics takes into account relevant international standards, including the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, ILO standards and conventions, World Bank Group Environmental, Health and Safety Guidelines, IFC Performance Standards and the Equator Principles.

Capital Dynamics does not currently apply an external industry classification system for R-Eye™ purposes; instead, R-Eye™ assessments are organised by Capital Dynamics’ proprietary private assets business line and strategy classifications, including Primaries , Secondaries, Direct Private Equity Investments and Clean Energy.

Data used in the R-Eye™ process may include due diligence questionnaires, investment memoranda, manager, sponsor, portfolio company, project company and contractor information, public information, industry and press monitoring, SFDR and European ESG Template reporting, PAI data, and tools including RepRisk. Sources may be public or non-public and may not always be assured. Where information is incomplete, Capital Dynamics may seek further information or apply estimates, proxies or industry information, subject to internal review.

Capital Dynamics uses RepRisk and other AI-enabled tools to monitor RI risks across investments, supply chains and key service providers. These tools support the process but do not replace human review, materiality assessment and escalation. Relevant limitations may include private markets data gaps, unaudited or non-standardised information, limited access to information in secondary transactions, third-party data limitations, AI false positives or false negatives and methodology judgement. Capital Dynamics seeks to keep these limitations under review through its ongoing monitoring and governance processes.

Oversight of the R-Eye™ system sits with the Responsible Investment Committee, whose remit includes implementing the RI framework, overseeing R-Eye™, reviewing the RI policy, making updates as RI issues arise and supporting implementation across business lines. Complex RI matters may be escalated to the Responsible Investment Committee, Risk Committee, CEO and Board as appropriate. Main conflicts may include investment team involvement in R-Eye™ assessments, and judgement-based scoring where data is incomplete, estimated or provided by third parties; conflicts arising from sustainability risks may be referred to the Conflicts and Compliance Committee for review and remedial action.

Costs associated with the R-Eye process are borne by the funds.

Responsible Investment Committee

Our Responsible Investment Committee includes representation from each investment strategy, investment risk functions, and senior client and business professionals.

The Committee works closely with each investment team as well as the organization as a whole to make sure our Responsible Investment philosophy runs through our entire business. 

The Committee:

•        Approves items such as Responsible Investment policy and UN PRI submissions

•        Advises Investment Committees on Responsible Investment best practice

•        Evaluated potential Responsible Investment alerts within our investment portfolios

•        Sets the agenda for Responsible Investment training, community involvement and the advancement of Responsible Investment thought leadership

EU Sustainable Finance Disclosure Regulation

The Sustainable Finance Disclosure Regulation (“SFDR”) applied from 10 March 2021. The SFDR requires financial market participants such as Capital Dynamics to provide information to investors with regards to the integration of sustainability risks, the consideration of adverse sustainability impacts, the promotion of environmental or social characteristics, and sustainable investment.

Our policies required by the SFDR can be found at the following links:

• Sustainable Risk Policy
• Remuneration Policy
• Adverse Impact Policy

Our disclosures required with respect to strategies with sustainable investment objectives can be found here.