Fairlight Global Small & Mid Cap (SMID) Fund
Responsible Investing Approach
The Responsible Entity has delegated investment decisions for the purposes of selecting, retaining or realising investments for the Fund to the Investment Manager, Fairlight. The Investment Manager's analysis of ESG considerations is drawn upon as part of its investment strategy for the Fund. The Investment Manager considers ESG issues at each stage of the investment process, including initial screening, stock research reports and the portfolio management process. The Fund is not designed for investors who are looking for funds that meet specific environmental, social and governance (ESG) goals. Integration of ESG considerations does not imply that the Fund is marketed or authorised as an ESG product in Australia. While the Investment Manager has systems and controls in place to oversee and review the information provided by third parties, there is a risk that errors or undisclosed changes from third parties may result in inadvertent exposure to otherwise excluded investments.
As part of its ESG analysis, the Investment Manager uses industry exclusion screens to account for the more obvious sources of ESG risk found in sectors including, but not limited to, tobacco, armaments, gambling, and mining. A maximum of 10% aggregate gross revenue exposure by companies to these restricted industries is permitted before these companies are excluded from ownership by the Fund. The Investment Manager also scores all researched companies across a range of ESG metrics which generates a cost of capital charge that is an input into company valuation. Fairlight has developed and implemented a proprietary scoring framework which each company will be assessed against to determine the company's individual ESG score. The scoring framework is based upon factors categorised across 3 pillars including Environmental (E), Social (S), and Governance (G). Based on this individual ESG score, companies with relatively poor ESG practices incur a larger discount rate than those that are best practice however, ESG score is not the only determining factor.
Documents
Exclusions
As part of its ESG analysis, the Investment Manager uses industry exclusion screens to account for the more obvious sources of ESG risk found in sectors including, but not limited to, tobacco, armaments, gambling, and mining. A maximum of 10% aggregate gross revenue exposure by companies to these restricted industries is permitted before these companies are excluded from ownership by the Fund. Note that the revenue data will be predominantly based on MSCI data. There are limitations of using revenue data and in such cases, revenues are estimated. The exclusions may not exclude a company or an issuer if data about that company or the issuer is incomplete, inaccurate or unavailable.
| Exclusions | Full/Partial Exclusion |
Description
|
|---|---|---|
 Tobacco
|
Partial | The Fund does not invest in companies that derive more than 10% of their aggregate revenues from the tobacco industry. |
 Weapons
|
Partial | The Fund does not invest in companies that derive more than 10% of their aggregate revenues from the armaments industry. |
 Environmental damage
|
Partial | The Fund does not invest in companies that derive more than 10% of their aggregate revenues from the mining industry. |
 Gambling
|
Partial | The Fund does not invest in companies that derive more than 10% of their aggregate revenues from the gambling industry. |
Inclusions
The Investment Manager's analysis of ESG considerations is drawn upon as part of its investment strategy for the Fund. The Investment Manager considers ESG issues at each stage of the investment process, including initial screening, stock research reports and the portfolio management process. As part of the ESG analysis, the Investment Manager scores all researched companies across a range of ESG metrics which generates a cost of capital charge that is an input into company valuation. Fairlight has developed and implemented a proprietary scoring framework which each company will be assessed against to determine the company's individual ESG score. The proprietary scoring framework is based upon factors categorised across 3 pillars including Environmental (E), Social (S), and Governance (G). Based on this individual ESG score, companies with relatively poor ESG practices incur a larger discount rate than those that are best practice however, ESG score is not the only determining factor.
The Manager seeks to engage on ESG and other issues with companies in which it invests as well as companies within its investment universe that it does not hold from time to time. Fairlight typically meets with companies several times a year, both in meetings post each reporting period and at other times during the year. At these meetings, it seeks to engage with the company on relevant issues, including issues relating to ESG. We will also engage with companies on ESG issues when a specific ESG issue arises in relation to a company or where a broader ESG issue impacts a company.
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UN Sustainable Development Goals
Conventions & Treaties
The Investment Manager is a signatory to the United Nations Principles for Responsible Investment (PRI).
| Conventions & Treaties | Aligned |
Description
|
|---|---|---|
| Principles for Responsible Investment | Yes | The Investment Manager is a signatory to the United Nations Principles for Responsible Investment (PRI). |
ESG Score
| ESG Score |
|
||
|---|---|---|---|
| Does the portfolio have an ESG score? | Not disclosed | ||
| If so, who is responsible for calculating the score? | Not disclosed | ||
| If a score is calculated, is this publicly available; i.e. displayed in monthly reports, on your website, etc.? | Not disclosed | ||
| If the portfolio has an ESG score, how often is that score recalculated to account for changes to portfolio holdings? | Not disclosed | ||
Impact Investing Score
| Impact Investing Score |
|
||
|---|---|---|---|
| Does the portfolio have an Impact Investment score? | Not disclosed | ||
| If a score is calculated, is this publicly available; i.e. displayed in monthly reports, on your website, etc.? | Not disclosed | ||
| If the portfolio has an Impact Investment score, how often is that score recalculated to account for changes to portfolio holdings? | Not disclosed | ||
| Does the fund publish its holdings publicly? | Partial | ||
Policies, Certification & Marketing
| Policies, Certification & Marketing |
|
|||
|---|---|---|---|---|
| Responsible investing policy | View Responsible investing policy document | |||
| Proxy voting policy | View Proxy voting policy document | |||
| Is the fund RIAA certified? | No | |||
| Investor Handbook | View Investor Handbook document | |||
| Proxy Voting Outcomes FY 2023 | View Proxy Voting Outcomes FY 2023 document | |||
| ESG Annual Review FY 2023 | View ESG Annual Review FY 2023 document | |||
Fairlight Global Small & Mid Cap (SMID) Fund
Strategy Summary
The Fund will invest in a portfolio of global small and mid capitalisation companies drawn from international equity markets outside Australia. The Fund aims to achieve annualised returns in excess of the benchmark (MSCI World SMID Cap Index (AUD)) after all fees and expenses measured over a market cycle, which the manager considers to be 7 years. The Fund takes a bottom up approach to investing with deep fundamental research of both the quantitative and qualitative aspects of investee companies.Key Terms
| Status: | Open | Inception Date: | Nov 2018 |
| Strategy: | Equity Long | Style: | Growth |
| Geography: | Global | Domicile: | Australia |
| Investors: | Wholesale & Retail | Min. Investment: | AU$20000 |
| Mgmt. Fee: | 1.25% | Perf. Fee: | 15% |