Sustainability information disclosure

Information about financial services promoted on this website

Capitalia group of companies consists of two entities.
Capitalia, SE is a crowdfunding service provider operating under authorization from the Bank of Latvia. It is engaged in matching of funding interests of investors and borrowers through the use of its crowdfunding internet platform.
Capitalia Fund Management AIFP, SIA is an alternative investment fund manager registered with the Bank of Latvia. It manages alternative investment funds marketed to professional investors, and to non-professional investors capable of independently making investment investment decisions and able to invest EUR 20,000 or more. Capitalia Fund Management AIFP, SIA is subject to the requirements of the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (“SFDR”) which sets a framework for explaining financial services firms' sustainability policies to their clients and the general public.

Sustainability considerations in the crowdfunding services

While evaluating the loan application for publishing on its crowdfunding platform, Capitalia, SE takes into consideration the project owner's environmental, social, and governance (ESG) practices, and assigns a grade for the project owner's impact on each ESG category. The ESG score has an impact on the project overall credit score and corresponding risk grade that is used to approve the loan and determine its pricing and conditions. A very low ESG score can be a disqualifying factor for loan issuance.

Sustainability considerations in the alternative fund management services

This disclosure below outlines Capitalia Fund Management AIFP, SIA approach to sustainability risks in relation to its financial products and services.

No consideration of sustainability risks (Article 3 of the SFDR)
Capitalia Fund Management AIFP, SIA does not consider sustainability risks in its investment decisions. Sustainability risks are defined as environmental, social, or governance (ESG) events or conditions that, if they occur, could cause an actual or a potential material negative impact on the value of the funds managed by Capitalia Fund Management AIFP, SIA.
The decision to exclude sustainability risks from the investment decision-making process is primarily based on the size of the organization and the availability of data.
Given the current size and resources of Capitalia Fund Management AIFP, SIA, we may lack the resources to implement proper sustainability risk assessments, and we have decided to focus on our core competencies.
The issuers and companies included in portfolios of our funds usually don't report the data that would be needed to consider sustainability risks systematically, consistently, and at a reasonable cost.

No consideration of Principle Adverse Impacts (Article 4 of the SFDR)
Capitalia Fund Management AIFP, SIA does not consider the principal adverse impacts (PAI) of its investment decisions on sustainability factors. Principal adverse impacts are the negative effects of investment decisions on sustainability factors, such as the environment, social and employee matters, respect for human rights, anti-corruption, and anti-bribery matters.
The decision to exclude PAI risks from the investment decision-making process is primarily based on the investment strategy, operating status, and size of the funds under management. The size of the organization and the availability of data also contributed to the decision.
Two of our funds have finished making investments and these financial products are not being offered to potential investors. The investments made by these funds are illiquid and they hold small share of capital in the portfolio companies. Implementing PAI consideration would not bring a tangible benefit. Our active fund is relatively small in size, and it can not have a significant negative impact on PAIs. Similarly to the sustainability risks in investment decision-making, we may lack the resources to implement proper assessment of the PAIs. The issuers and companies included in portfolios of our funds usually don't report the data that would be needed to consider PAI systematically, consistently, and at a reasonable cost.

Remuneration policy (Article 5 of the SFDR)
In light of the decision not to include sustainability risks and PAIs in its investing decision-making, the employee remuneration policy at Capitalia Fund Management AIFP, SIA does not integrate sustainability risk management considerations.

Information on a financial product level (Article 7 of the SFDR)
Capitalia Fund Management AIFP, SIA applies the approach described here to the alternative investment funds it manages. Since the funds are not offered publicly, the fund-specific information is provided to potential investors as a part of pre-contractual disclosure.

Future plans and possible changes to the policy
Capitalia Fund Management AIFP, SIA ensures compliance with all relevant regulations and periodically reviews policies to maintain ongoing compliance. This includes disclosing required information in a clear, concise, and accessible manner.
While Capitalia Fund Management AIFP, SIA recognizes the importance of sustainability, for now, its investment strategies, organizational structure and business operations remain unchanged with respect to the integration of sustainability risks and PAIs. Capitalia Fund Management AIFP, SIA may alter its approach to managing sustainability risks if future changes in its investment product range, size of the organization, or applicable regulation will warrant this. In this case, we will disclose our new approach to managing sustainability risks on the website.

How to obtain more information

For more information, please contact us at:

info@capitalia.com