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    Policy third party solutions

    Athora Netherlands has developed Fundamental Investment Principles (FIP) to assess investment targets’ responsibility performance.

    1. Athora Netherlands offers its clients comprehensive responsible investment solutions. However, being a responsible investor with limited scale only, not all of our offerings need to be produced in-house. They can also be sourced from external specialised managers. Athora Netherlands acknowledges that its sphere of influence and derived responsibility extends to rendering also those investments responsible that are made through third parties.

    Rather than developing a complex rating model, Athora Netherlands chooses for concise guiding principles for its profoundly case-by-case driven analyses. This does not lead to semi-automated binary choices. It necessitates informed and in-depth discussions regarding investment decisions, against the background of the large diversity of specialised asset managers and their services and products.

    Looking at third party solutions in their most basic form, Athora Netherlands  identifies two distinct sets:

    2. Segregated mandates, where Cardano’s client remains in full control as asset owner. This puts Athora Netherlands in a position to implement its responsible overlay on its client’s behalf.

    3. Pooled funds, where Cardano’s client becomes a (minority) shareholder. Here, Cardano’s client participates in a fund that acts as the primary asset owner having to serve all participants’ interests on an equal footing. That is, the fund, not Cardano, is the prime party responsible for the development and implementation of strategies and policies, possibly including responsible ones.

    It should be clear that segregated mandates offer more possibilities to exert influence than pooled funds:

    • With segregated mandates, Athora Netherlands will instruct the external manager, costs admitting in the light of our fiduciary duties, to implement Cardano’s responsible investment decisions one-on-one (i.e., its exclusion list)
    • With pooled funds, Athora Netherlands will, all other things being equal, prefer selecting responsible investment managers over those that lack a credible and well implemented responsible strategy.

    In order to implement these responsibilities, Athora Netherlands  discerns the following aspects of third party solutions:

    • Clients
    • asset categories
    • third party managers
    • products and their investments
    • monitoring

    With respect to clients, Athora Netherlands  will ensure to thoroughly understand clients’ views on responsible investing. In particular, this will address the extent to which responsible investment strategies should be part of external manager selection processes. Athora Netherlands  will thus add a responsible investing paragraph to its investment management agreements. Athora Netherlands  will not serve clients who do not support the implementation of our FIP as a minimum – unless they follow other, stricter criteria – including our FIP-derived approach toward third party solutions.

    Concerning investments in specific asset categories through third parties, Athora Netherlands  will successively develop the necessary responsible investment frameworks. This should include relevant criteria, research methodologies, and allocation and selection processes.

    When selecting a manager, Athora Netherlands  will investigate that party’s responsible investment credentials. Ceteris paribus, Athora Netherlands  will prefer those parties more advanced in responsible investing than others. If other (e.g. fiduciary) considerations press for a choice for a less advanced party (concerning responsible investing), Athora Netherlands  will engage with that party, striving to help improve the latter’s responsible investments strategies and implementation. In doing so, Athora Netherlands  will follow a nondogmatic approach: Athora Netherlands  will be open to any responsible investment strategy, as long as it is credible and consistently implemented and does not conflict with Cardano’s FIP or their underlying vision.

    Looking at products and their investments, Athora Netherlands  will, whenever feasible given fiduciary duties, favour segregated accounts over pooled funds. This is due to the higher degree of influence that can be exerted with the latter. Here, Athora Netherlands  will ask third parties to implement its FIP and related investment decisions, unless such action cannot be justified in economic terms. To do so, Athora Netherlands  will strive to develop the necessary research coverage if not yet present, along with proxy voting for all firms invested in, and engagement activities where applicable.

    Where pooled funds are regarded the better solution, Athora Netherlands  will, ceteris paribus, strongly prefer more over less responsible investment strategies, as identified through careful due diligence. Should the strategy (or its implementation) not be fully satisfactory, Athora Netherlands  might also decide to engage with the external party, seeking adaptations through dialogue. Even if the strategy is deemed satisfactory, it could happen for the product to make investments in titles that Athora Netherlands  does, on its own account and based on its FIP and research coverage, exclude from investment.

    Given the careful due diligence conducted, and the described non-dogmatic stance toward other managers’ (responsible) strategies, Athora Netherlands  would in such a case enter into a dialogue with the party. The objective would be to fully understand that manager’s choice and underlying reasoning, and, if opportune, to discuss rebalancing toward titles not excluded by Cardano.

    Athora Netherlands  will regularly monitor third parties’ investments, and compare them with its FIP-based exclusions. Any deviations will be handled as described above.


    1) The FIP focus on investment targets’ (expected or likely) (involvement in) serious violations of human rights (including child and forced labour), environmental damage, corruption, and generally accepted ethical principles. Furthermore, Athora Netherlands  does not want to invest in companies involved in the production of weapon systems of which the effects are disproportional, or that make no distinction between military and civil targets.

    2) Please note that the research universe underlying the FIP not necessarily matches the investment universe of the product in question. Cardano’s research results, e.g. its exclusion list, may be more limited in scope than the product at hand, leading to possible gaps in research coverage. If this occurs, optimal transparency will be granted in depicting these limitations.

    3) E.g. alternative investments like commodities, derivatives, hedge funds, private equity etc.