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Evli Private Debt Fund I

Private Debt is a strongly growing asset class which provides tailor-made solutions for the borrowers. The characteristics of the asset class include stable and predictable income yield, high risk adjusted return and diversification benefits. Our fund invests globally, through high quality private debt funds, in illiquid corporate loans and bonds.

Overview
Responsibility

Fund overview

Stable and predictable cash flow

Credit investments provide stable cash flow and principal payment at a maturity date. Expected annual return of 7-10 %  and cash flow for investors 4-5%.

Diversification on multiple levels

Efficient geographical, strategy and manager level diversification. Fund will invest in about 10-12 private debt funds, and each of the target funds will invest in around 25-75 loans, depending strategy.

Loans provide return and security

Senior loans have first priority to borrower`s assets. Lender has ability to take control of the company or liquidate the assets if covenants are breached or payments have not made on time.

Access to the leading Private Debt Funds globally

Evli Private Debt Fund I fund provides access to selected, hard-to-access private debt funds with reasonable capital.

Globally growing supply and demand

Changes in bank regulation and companies´ increased financing need, driven by increase in private equity, have increased demand for private loans.

Highly experienced investment team

Investment team has extensive experience in private assets and excellent long-term performance on private debt strategies.

 

NB! This product is intended for professional investors and a limited number of non-professional clients who make an investment of at least € 100,000 and who are considered to have an adequate understanding of the fund and its investment activities.

The scenarios presented herein are estimates based on historical data on the performance of similar investments, as well as current market conditions, and they are not exact indicators. Actual results will vary, depending on the market development during the fund term.

Suitable for investors

  • who wants to invest in hard-to-access private debt funds with reasonable capital
  • who wants to get diversification benefits in the investment portfolio by adding an asset class that has a low correlation with other asset classes
  • who seeks strong and predictable cash flow in the long term
  • who accepts the low liquidity of private debt investments and the long term of the fund
  • who accepts that the fund unit cannot be redeemed prematurely and that there is no organized secondary market for it
  • for a professional investors and a limited number of non-professional clients who are considered to have an adequate understanding of the fund and its investment activities.

This page provides general product information and is marketing communication. Historical returns are no guarantee of future returns. The value of an investment may rise and fall and the investor may lose some or all of the capital invested. The contents of this website should not be considered as investment advice and should not be relied upon in making an investment decision. Before making an investment decision, please consult the fund's legal documents, such as the key investor document. The information is available to those considering an investment from Evli.

Sustainability-related disclosures

Financial product’s sustainability information in accordance with EU Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 (sustainability‐related disclosures in the financial services sector). This is a financial product in accordance with Article 8 of the SFDR.

Publication date: December 5, 2022
Legal Entity Identifier: 3205949-6 (business identity code)

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments.

The fund promotes environmental and social characteristics as part of investment activities by integrating sustainability factors into the due diligence process carried out prior to investment, assessing fund managers during the investment period, excluding certain industries, and engaging with fund managers through active dialogue. The fund complies with Evli’s Principles for Responsible Investment and the separate responsibility principles of private debt funds.

The fund encourages the fund managers of target funds to incorporate sustainability factors into the various areas of their operations. During the investment period, the portfolio managers regularly monitor and assess the fund managers’ ESG practices and performance on the basis of the target funds’ ESG reporting and a regular ESG survey carried out by the fund, and engage in active cooperation with the aim of reducing the likelihood of sustainability risks materializing. The fund issues each target fund its own ESG rating, which is based on an assessment carried out by the fund’s investment team. Evli’s Principles for Responsible Investment and the responsibility principles of Private Debt funds set the framework for Evli’s engagement.

In addition, the fund encourages management companies to report climate data and set their own climate targets. The fund promotes climate change mitigation by meeting Evli’s climate targets. Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

The approach to ESG integration is driven by a need to understand how the fund manager takes account of key ESG questions at different stages of the investment process. Before making an investment, the principal objective is to understand the current level of ESG management of the target fund’s management company. The fund requires all the target funds’ management companies to set their own ESG policy and to commit to responsible investment practices. The fund will not make new commitments to fund management companies that do not have their own ESG policy and that are not committed to responsible investment practices. When deciding upon new investments, the target fund’s exclusion practices are assessed and the aim is to avoid investing in industries that Evli has excluded. The fund of funds manager can, under certain conditions, deviate from Evli’s exclusion criteria. Furthermore, exclusion may be agreed upon with a management company of the target fund with respect to a certain industry. Before making a commitment to a target fund, the fund will make its own ESG assessment of the target fund. The fund requires good corporate governance from the fund managers of target funds.

All active investments of the fund promote environmental and social characteristics. The proportion of target fund management companies that report on their carbon intensity, the proportion of management companies that have climate targets, and the proportion of management companies that take account of and report on the principal adverse impacts on the environment and society (PAI indicators) of their investment decisions are used to measure the implementation of the environmental and social characteristics promoted by the fund. The fund will carry out a separate ESG assessment on the management company before making a commitment. The ESG assessment is repeated annually. It collects data on sustainability indicators that are relevant to the promotion of the fund's environmental and social characteristics. The data is not verified by a third party and the completeness of the data is reported at the same time. The completeness of the data does not affect compliance with the above principles.

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments.

The fund promotes environmental and social characteristics as part of investment activities by integrating sustainability factors into the due diligence process carried out prior to investment, assessing fund managers during the investment period, excluding certain industries, and engaging with fund managers through active dialogue. The fund complies with Evli’s Principles for Responsible Investment and the separate responsibility principles of private debt funds.

The fund encourages the fund managers of target funds to incorporate sustainability factors into the various areas of their operations. During the investment period, the portfolio managers regularly monitor and assess the fund managers’ ESG practices and performance on the basis of the target funds’ ESG reporting and a regular ESG survey carried out by the fund, and engage in active cooperation with the aim of reducing the likelihood of sustainability risks materializing. The fund issues each target fund its own ESG rating, which is based on an assessment carried out by the fund’s investment team.

In addition, the fund encourages management companies to report climate data and set their own climate targets. The fund promotes climate change mitigation by meeting Evli’s climate targets. Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50 percent reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

Environmental and social factors are also promoted through the fund’s broad exclusion practices. The fund aims to exclude investments that are harmful or controversial industries such as tobacco, adult entertainment, controversial lending, weapons and firearms, and peat production. The fund will also not invest in target funds that do not exclude companies that are in contact with child labor or corruption, for example.

The fund complies with both Evli’s general and the fund’s own Principles for Responsible Investment. The fund will not make new commitments to fund management companies that do not have their own ESG policy and that are not committed to responsible investment practices. When deciding upon new investments, the target fund’s exclusion practices are assessed and the aim is to avoid investing in industries that Evli has excluded. The fund of funds manager can, under certain conditions, deviate from Evli’s exclusion criteria. Furthermore, exclusion may be agreed upon with a management company of the target fund with respect to a certain industry. Before making a commitment to a target fund, the fund will make its own ESG assessment of the target fund.

The fund requires good corporate governance from the fund managers of target funds. An assessment of the quality of corporate governance is an integral part of the assessment of the fund’s potential target funds. The governance assessment deals with four aspects of the corporate governance of the business activities of the fund manager and its management (effective governance structures, relationships with employees, remuneration of personnel and compliance with tax provisions), and the risk assessment capacity related to corporate governance and the tools available for this. Similarly, the target funds of Evli Debt I require their investments to follow good governance practices in accordance with the target fund’s ESG policy.

All active investments of the fund promote environmental and social characteristics.

The proportion of target fund management companies that report on their carbon intensity, the proportion of management companies that have climate targets, and the proportion of management companies that take account of and report on the principal adverse impacts on the environment and society (PAI indicators) of their investment decisions are used to measure the implementation of the environmental and social characteristics promoted by the fund. During the investment period, the portfolio managers regularly monitor and assess the fund managers’ ESG practices and performance on the basis of the target funds’ ESG reporting and a regular ESG survey carried out by the fund.

The environmental and social characteristics promoted by the financial product are monitored and reported using the sustainability indicators mentioned above.

The fund will carry out a separate ESG assessment on the management company before making a commitment. The ESG assessment is repeated annually. It collects data on sustainability indicators that are relevant to the promotion of the fund's environmental and social characteristics. The data is not verified by a third party and the completeness of the data is reported at the same time.

The achievement of the promoted environmental and social characteristics is reported annually through the sustainability indicators mentioned above, in conjunction with which the completeness of the data is also reported. All active investments of the fund promote environmental and social characteristics by observing Evli’s Principles for Responsible Investment and the responsibility principles of Private Debt funds. The completeness of the data does not affect compliance with the above principles.

The fund’s approach to ESG integration is driven by a need to understand how the fund manager takes account of key ESG questions at different stages of the investment process. Before making an investment, the principal objective is to understand the current level of ESG management of the target fund’s management company. The fund requires all the target funds’ management companies to set their own ESG policy and to commit to responsible investment practices. The fund encourages the fund managers of target funds to incorporate sustainability factors into the various areas of their operations. The fund will not make a commitment to a fund that does not have an ESG policy or that is not committed to responsible investment practices (such as the United Nations Principles for Responsible Investment, UNPRI). Furthermore, the fund will carry out a separate ESG assessment of each target fund before making a commitment. This assessment will be repeated annually. The methods are based on data collected from the management companies, which is not verified by a third party.

The financial product can be used to engage with the target funds’ management companies as part of the promotion of environmental and social characteristics. Evli’s Principles of Responsible Investment and the responsible investment principles of Private Debt funds set the framework for Evli’s engagement and conduct in the event of observed breaches of the norms.

The fund does not have a benchmark index.

Principles for responsible investment

Evli Private Equity, Evli Infrastructure and Evli Private Debt funds’ principles for responsible investment

Responsibility report

Evli Private Debt Fund I ESG Report 2023

Fund (AIF) Evli Private Debt Fund I Ky
Legal structure Finnish limited partnership (kommandiittiyhtiö)
Fund manager (AIFM) Evli Fund Management Company Ltd
Geographic focus North America and Europe
Investment focus Private Debt Funds (primary and secondary)
Strategy Fund-of-funds
Fund term 9 years
Investment period 2 years
Target return 7-10 % p.a. net IRR*, cash flow target 4-5% for the finished portfolio

The target return and cash flow target return are based on an estimate of the development of the investment’s value and market conditions. The realized return is influenced by the success of the investment activity and the realized market development. The set return target may not be achieved. The value of the investment may rise and fall and the investor may lose all or part of the invested capital.
Minimum investment EUR 100,000
Target size EUR 100-200 million

* internal rate of return 

Fund's expenses and other supplementary information are available in the Key Investor Information Document.