Sustainability-related disclosures pursuant to Regulation (EU) 2019/2088 (“SFDR”)

Date of update: 29 August 2024 (addition of sustainability-related disclosures regarding Cherry Ventures Fund V GmbH & Co. KG, Cherry Ventures Select V GmbH & Co. KG and Cherry Ventures Fund V Entrepreneurs GmbH & Co. KG)

Date of publication: 10 March 2021

Date of update: 6 December 2022 (implementation of recent legislative developments, addition of sustainability-related disclosures regarding Cherry Ventures Fund IV GmbH & Co. KG, and editorial amendments and clarifications)

Date of update: 13 March 2024 (addition of sustainability-related disclosures regarding Cherry Ventures Opportunities V GmbH & Co. KG and Cherry Ventures Opportunities X GmbH & Co. KG)

Date of update: 12 May 2026 (revision of individual product-level disclosures to reflect updated regulatory requirements and editorial amendments)

I. Sustainability risks

Cherry Ventures Management GmbH (“Cherry Ventures”, LEI:391200KFLCM0G1BON952) considers sustainability risks as part of its investment decision-making process. Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. Cherry Ventures considers and assesses sustainability risks as part of its due diligence process prior to any investment. Such assessment is being conducted by using a questionnaire. The results of such assessment are taken into account when the investment decision is being taken. However, Cherry Ventures remains free in its decision to refrain from investing or to invest despite sustainability risks, in which case Cherry Ventures can also apply measures to reduce or mitigate any sustainability risks. At all times, Cherry Ventures will apply the principle of proportionality taking due account of the strategic relevance of an investment as well as its transactional context.

II. No consideration of adverse impacts of investment decisions on sustainability factors

Cherry Ventures does not consider any adverse impacts of its investment decisions on sustainability factors and, hence, does not use the sustainability indicators listed in Annex I of the Regulatory Technical Standards (Delegated Regulation (EU) 2022/1288, “RTS”) to identify and assess potential adverse impacts. Sustainability factors are environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery.

Given that the SFDR, the Regulation (EU) 2020/852 (“EU Taxonomy”) and the accompanying RTS have now been in force for some time, there is a growing body of regulatory guidance and market practice. However, significant legal and practical uncertainties persist regarding their application to venture capital as an asset class. This is particularly relevant for Cherry Ventures, whose investment strategy focuses on mostly early stage companies. Such companies typically have limited experience in ESG reporting and often lack the infrastructure to provide comprehensive ESG data. Moreover, the burden associated with considering adverse impacts on sustainability factors (particularly if sustainability indicators are used) is disproportionate in light of the very limited relevance that such impacts could have in the context of Cherry Ventures’ investment strategy: Cherry Ventures pursues an active venture capital strategy and invests in start-ups in the digital economy mainly in the European Union. As a result of the business and geographic focus (digital business models in highly regulated jurisdictions), Cherry Ventures’ investment decisions are rather unlikely to have severe adverse impacts on sustainability factors. Furthermore, given the early-stage investment strategy, there are usually no (or only very few) adverse impacts that could be assessed through the sustainability indicators listed in Annex I of the RTS. However, Cherry Ventures obligates its portfolio companies to collect and report data on negative effects on sustainability factors on a mandatory and at least annual basis.

If and to the extent that the legal uncertainties will be resolved and a practicable market and administrative practice will evolve in this regard, Cherry Ventures will re-evaluate considering principal adverse impacts of its investment decisions in due course. In the meantime, Cherry Ventures remains free in its decision to use part of the sustainable indicators listed in Annex I of the RTS and/or its own set of indicators.

III. Remuneration disclosures

Cherry Ventures considers sustainability risks as part of its investment decision-making process, but not as part of its remuneration policy.

IV. Sustainability-related disclosures

1. Cherry Ventures Fund IV GmbH & Co. KG

In addition, Cherry Ventures considers it a substantial burden for its early-stage portfolio companies to collect and report the relevant data as required by the SFDR and the accompanying RTS.

Financial product: Cherry Ventures Fund IV GmbH & Co. KG (“Cherry IV”)

However, Cherry Ventures obligates its portfolio companies to collect and report data on negative effects on sustainability factors on a mandatory and at least annual basis.

LEI: 984500B7E69K04FFCL49

Summary

Cherry IV considers certain environmental and/or social characteristics as part of its investment decisions and monitoring processes but does not seek to make sustainable investments as defined in the SFDR. The consideration of environmental and/or social characteristics is carried out both before and after an investment. For this purpose, information is initially and regularly obtained from the portfolio companies by means of qualitative queries. Cherry IV incorporates exclusion (negative screening) aspects during the decision-making process. Thereby Cherry IV considers several ESG themes to be the key to responsible investing. The actions and decisions described in the following section are each made by Cherry Ventures for and on behalf of Cherry IV.

Zusammenfassung

Der Fonds berücksichtigt bestimmte ökologische und/oder soziale Merkmale im Rahmen seiner Investitionsentscheidungen und Monitoring-Prozesse, strebt aber keine nachhaltigen Investitionen im Sinne der SFDR an. Die Berücksichtigung von Umwelt- und/oder Sozialmerkmalen erfolgt sowohl vor als auch nach einer Investition. Zu diesem Zweck werden zunächst und regelmäßig Informationen von den Portfoliounternehmen durch qualitative Abfragen eingeholt. Der Fonds bezieht Exklusionsaspekte (negatives Screening) in seinen Entscheidungsprozess ein. Dabei betrachtet der Fonds mehrere ESG-Themen als Schlüssel für verantwortungsvolles Investieren. Die in diesem Abschnitt beschriebenen Handlungen und Entscheidungen erfolgen jeweils durch Cherry Ventures für den Fonds.

No sustainable investment objective

Cherry IV promotes environmental or social characteristics, but does not have as its objective sustainable investment.

If and to the extent that the legal uncertainties will be resolved and a practicable market and administrative practice will evolve in this regard, Cherry Ventures will re-evaluate considering principal adverse impacts of its investment decisions in due course.

As a registered alternative investment fund manager within the meaning of Sec. 2 (4) of the German Investment Code (Kapitalanlagegesetzbuch, “KAGB”) and a manager of a qualifying venture capital fund as defined in Art. 3 (b) of Regulation (EU) No. 345/2013 (“EuVECA-Regulation”), Cherry Ventures does not have and does not need to have a remuneration guideline or policy in accordance with the requirements of the KAGB or the EuVECA Regulation.

In the meantime, Cherry Ventures remains free in its decision to use part of the sustainable indicators listed in Annex I of the RTS and/or an own set of indicators.

Proportion of investments

Cherry IV will invest fully in line with its investment strategy and investment restrictions, i.e., will only make investments which are aligned with its environmental or social characteristics (i.e., its investment exclusions). Cherry IV does not make and does not intend to make sustainable investments within the meaning of Art. 2 No. 17 SFDR or environmentally sustainable investments within the meaning of Art. 3 EU Taxonomy; hence, no portion of its investments will be aligned with the Taxonomy.

Monitoring of environmental or social characteristics

Cherry IV has an increased awareness on the impact of environmental or social characteristics on risk management and thus on the value potential of investments. In order to monitor the environmental or social characteristics promoted by Cherry IV (i.e., its investment exclusions), Cherry IV consults with the portfolio companies in regular intervals and will carry out further checks in order to identify potential issues with such characteristics. Therefore, Cherry IV monitors compliance with its environmental or social characteristics (i.e., its investment exclusions) on an ongoing basis. External monitoring mechanisms are not in place.

Methodologies for environmental or social characteristics

Cherry IV applies qualitative assessments with regard to its environmental or social characteristics (i.e., its investment exclusions).Cherry IV conducts an initial assessment in the course of its due diligence. Based on the results of such assessment, Cherry IV identifies during its investment decision-making process whether the environmental or social characteristics promoted by Cherry IV are met. During the holding period, Cherry IV monitors and consults with its portfolio companies in order to assess whether said characteristics are continuously met.

Data sources and processing

In order to attain each of the environmental or social characteristics promoted by Cherry IV (i.e., its investment exclusions), a questionnaire is completed by the (potential) portfolio companies in the course of the due diligence conducted prior to each investment. Moreover, during the holding period, the portfolio companies provide Cherry IV with the relevant data through an ESG reporting tool implemented by Cherry Ventures on an at least annual basis for monitoring purposes. Hence, data is obtained only from the (potential) portfolio companies and no (proportion of) data is estimated or supplemented by information publicly available. An internal or external review or verification of the information obtained will be carried out if misrepresentations are suspected.

Limitations to methodologies and data

The information collected from the (potential) portfolio companies via the questionnaire as part of the due diligence carried out by Cherry IV is internally or externally verified only if and to the extent misrepresentations are suspected. Thus, it cannot be ruled out completely that false information may remain undetected in certain cases. As Cherry IV’s investments are made for several years, Cherry IV considers it a priority to establish and maintain a trustful working relationship with its portfolio companies in order to ensure compliance with the environmental or social characteristics promoted by Cherry IV (i.e., its investment exclusions). Further limitations, in particular with regard to the accuracy of the data and reliability of the data sources used, are not apparent at this time.

Due diligence

An initial assessment of how an investment relates to the environmental or social characteristics promoted by Cherry IV (i.e., its investment exclusions) is carried out as part of the due diligence process using a questionnaire and, where required based on the inherent ESG risk of the portfolio company, through an enhanced analysis. As a rule, purely qualitative statements of an environmental or social nature or relating to corporate governance are requested from the portfolio companies and then taken into account in the investment decision-making process. An internal or external review or verification of the information obtained will only be carried out if misrepresentations are suspected.

Engagement policies

Engagement is, in general, not part of the environmental or social investment strategy of Cherry IV. However, should Cherry IV determine any potential issues relating to the environmental or social characteristics promoted by Cherry IV, Cherry IV may engage the respective portfolio companies in discussions in order to resolve, reduce or mitigate any adverse effects. Yet, it remains at the sole discretion of Cherry IV to determine which efforts are appropriate and proportionate in light of the size and strategic importance of the respective portfolio company as well as the transactional context.

Designated reference benchmark

No index has been designated as a reference benchmark to meet the environmental or social characteristics promoted by Cherry IV.

2. Cherry Ventures Opportunities V GmbH & Co. KG

Financial product: Cherry Ventures Opportunities V GmbH & Co. KG

Environmental or social characteristics of the financial product

Cherry IV promotes environmental and/or social characteristics by implementing certain investment exclusions (see section ‘Investment strategy’) during the decision-making process.

Investment strategy

The purpose of Cherry IV is to build, hold and manage (including to divest) a portfolio of equity and equity-related investments in portfolio companies. Thereby, Cherry IV will invest in portfolio companies from all sectors with innovation capacity and growth potential, with a focus on internet and software technology businesses. Early stage investments – i.e., seed stage, early stage and growth stage investments – should be a specified target segment. Hence, investments are expected to be spread across a wide range of economic activities. Particularly, Cherry IV will mainly invest into portfolio companies which, at the time of the investment, qualify as small-or medium sized enterprises and are based or active in the Federal Republic of Germany or in an EU Member State.

LEI: 9845003DA36FOEB5J769

Cherry IV is bound by the investment restrictions and limitations set out in Cherry IV’s limited partnership agreement and shall procure that such requirements, restrictions and limitations are complied with at all times. In particular, Cherry IV will screen each investment opportunity against its investment exclusions and no investments will be made in the area of such exclusions.

The disclosures relating to Cherry IV apply accordingly to Cherry Ventures Opportunities V GmbH & Co. KG (“Cherry Opps V”) with the exception that the investment strategy differs, and Cherry Opps V has implemented more extensive investment exclusions.

Cherry IV shall not invest, guarantee or otherwise provide financial or other support, directly or indirectly, to companies, including portfolio companies, or other entities whose business activity consists of:

3. Cherry Ventures Opportunities X GmbH & Co. KG

performing research and innovation activities considered as illegal according to the applicable legislation in the country of the portfolio company;

Financial product: Cherry Ventures Opportunities X GmbH & Co. KG

an illegal economic activity (i.e., any production, trade or other activity, which is illegal under the laws or regulations applicable to Cherry IV or the relevant company or entity, including without limitation, human cloning for reproduction purposes);

LEI: 391200NJ4NFYA8MPHR32

the production of tobacco and distilled alcoholic beverages and related products;

4. Cherry Ventures FUND V GmbH & Co. KG

the production of and trade in weapons and ammunition of any kind;

Financial product: Cherry Ventures Fund V GmbH & Co. KG

casinos and equivalent enterprises;

LEI: 391200G05J8K3Z3XCT15

the research, development or technical applications relating to electronic data programs or solutions, which (i) aim specifically at: (A) supporting any activity referred to under lit. b) through e); (B) internet gambling and online casinos; or (C) pornography; or which (ii) are intended to enable to illegally (A) enter into electronic data networks; or (B) download electronic data;

5. Cherry Ventures SELECT V GmbH & Co. KG

research activities (i) aiming at human cloning for reproductive purposes; (ii) intended to modify the genetic heritage of human beings which could make such changes heritable (excluding research relating to cancer treatment of gonads); and (iii) intended to create human embryos solely for the purpose of research or for the purpose of stem cell procurement, including by means of somatic cell nuclear transfer.

Financial product: Cherry Ventures Select V GmbH & Co. KG

Good governance practices are assessed through a questionnaire as part of every due diligence process prior to any investment made by Cherry IV. Such practices include, in particular, sound management structures, employee relations, remuneration of staff and tax compliance within the portfolio companies. Moreover, Cherry IV will conduct regular monitoring of the good governance practices in its portfolio companies during the holding period. If Cherry IV becomes aware of severe governance issues, it will investigate them and work with all parties involved to find an appropriate solution.

LEI: 3912004Y666WAX6ZJZ71

6. Cherry Ventures FUND V ENTREPRENEURS GmbH & Co. KG

Financial product: Cherry Ventures Fund V Entrepreneurs GmbH & Co. KG

LEI: 391200YO5TSM62RWV157

Summary

Cherry V Entrepreneurs considers certain environmental and/or social characteristics as part of its investment decisions and monitoring processes but does not seek to make sustainable investments as defined in the SFDR. The consideration of environmental and/or social characteristics is carried out indirectly through Cherry V Entrepreneurs' sole investment in Cherry V. Cherry V Entrepreneurs is a feeder vehicle with a sole investment in Cherry V. Through its sole investment in Cherry V, Cherry V Entrepreneurs indirectly incorporates exclusion (negative screening) aspects during the decision-making process. Thereby Cherry V Entrepreneurs considers several ESG themes to be the key to responsible investing. The actions and decisions described in the following section are each made by Cherry Ventures for and on behalf of Cherry V Entrepreneurs.

Zusammenfassung

Der Fonds berücksichtigt bestimmte ökologische und/oder soziale Merkmale im Rahmen seiner Investitionsentscheidungen und Monitoring-Prozesse, strebt aber keine nachhaltigen Investitionen im Sinne der SFDR an. Die Berücksichtigung von Umwelt- und/oder Sozialmerkmalen erfolgt indirekt über das alleinige Investment des Fonds in Cherry V. Der Fonds ist ein Feeder-Vehikel mit einem einzelnen Investment in Cherry V. Durch dieses alleinige Investment bezieht der Fonds indirekt Exklusionsaspekte (negatives Screening) in seinen Entscheidungsprozess ein. Dabei betrachtet der Fonds mehrere ESG-Themen als Schlüssel für verantwortungsvolles Investieren. Die in diesem Abschnitt beschriebenen Handlungen und Entscheidungen erfolgen jeweils durch Cherry Ventures für den Fonds.

No sustainable investment objective

Through its sole investment in Cherry V, Cherry V Entrepreneurs promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Environmental or social characteristics of the financial product

Through its sole investment in Cherry V, Cherry V Entrepreneurs indirectly promotes environmental and/or social characteristics, as Cherry V implements certain investment exclusions (see section ‘Investment strategy’) during the decision-making process.

Investment strategy

Cherry V Entrepreneurs is a feeder fund to Cherry V. The sole purpose of Cherry V Entrepreneurs is to invest in Cherry V. Cherry V, in turn, promotes environmental and/or social characteristics by implementing certain investment exclusions. Cherry V Entrepreneurs promotes the same environmental and social characteristics as Cherry V through its investment.

Through its sole investment in Cherry V, Cherry V Entrepreneurs is bound by the investment restrictions and limitations as set out in Cherry V’s limited partnership agreement. Cherry V does not invest, guarantee or otherwise provide financial or other support directly or indirectly, to companies or other entities whose business activity consists of: 

1. performing research and innovation activities considered as illegal according to the applicable legislation in the country of the portfolio company;
2. an illegal economic activity (i.e., any production, trade or other activity, which is illegal under the laws or regulations applicable to Cherry V or the relevant company or entity, including without limitation, human cloning for reproduction purposes);
3. the production of tobacco and distilled alcoholic beverages and related products;
4. the production of and trade in (i) controversial weapons as specified under Commission Delegated Regulation (EU) 2022/1288 (Sustainable Finance Disclosure Regulation – Regulatory Technical Standards); (ii) nuclear weapons within the meaning of Sec. 17(2) of the German Military Weapons Control Act; as well as (iii) ammunition, war heads, igniters and targeting heads to be used in the deployment of systems referred to in clause (i) or (ii) of this clause;
5. casinos and equivalent enterprises;
6. the research, development or technical applications relating to electronic data programs or solutions, which (i) aim specifically at: (A) supporting any activity referred to under lit. b) through e); (B) internet gambling and online casinos; or (C) pornography; or which (ii) are intended to enable to illegally (A) enter into electronic data networks; or (B) download electronic data;

In addition, when providing support to the financing of the research, development or technical applications relating to (i) human cloning for research or therapeutic purposes, or (ii) GMOs, Cherry V shall ensure the appropriate control of legal, regulatory and ethical issues linked to such human cloning for research or therapeutic purposes and/or GMOs.

Through its sole investment in Cherry V, good governance practices are assessed through a questionnaire, or, in small scale transactions through an informal process as appropriate in light of the circumstances, as part of every due diligence process prior to any investment made by Cherry V. Such practices include, in particular, sound management structures, employee relations, remuneration of staff and tax compliance within the portfolio companies. Moreover, Cherry V will conduct regular monitoring of the good governance practices in its portfolio companies during the holding period, indirectly applicable to Cherry V Entrepreneurs as its feeder fund. If Cherry V becomes aware of severe governance issues, it will investigate them and work with all parties involved to find an appropriate solution.

Proportion of investments

Through its sole investment in Cherry V, Cherry V Entrepreneurs will invest fully in line with its investment strategy and investment restrictions, i.e., will only make investments which are aligned with its environmental or social characteristics (i.e., its investment exclusions). Cherry V Entrepreneurs does not make and does not intend to make sustainable investments within the meaning of Art. 2 No. 17 SFDR or environmentally sustainable investments within the meaning of Art. 3 EU Taxonomy; hence, no portion of its investments will be aligned with the Taxonomy.

Monitoring of environmental or social characteristics

Cherry V Entrepreneurs solely invests in Cherry V. Cherry V, in turn, has an increased awareness on the impact of environmental or social characteristics on risk management and thus on the value potential of investments, indirectly applicable to Cherry V Entrepreneurs as its feeder fund. In order to monitor the environmental or social characteristics promoted by Cherry V (i.e., its investment exclusions), Cherry V consults with the portfolio companies in regular intervals and will carry out further checks in order to identify potential issues with such characteristics. Therefore, Cherry V monitors compliance with its environmental or social characteristics (i.e., its investment exclusions) on an ongoing basis. External monitoring mechanisms are not in place.

Methodologies for environmental or social characteristics

Cherry V Entrepreneurs solely invests in Cherry V. Cherry V, in turn, applies qualitative assessments with regard to its environmental or social characteristics (i.e., its investment exclusions), indirectly applicable to Cherry V Entrepreneurs as its feeder fund. Cherry V conducts an initial assessment in the course of its due diligence. Based on the results of such assessment, Cherry V identifies during its investment decision-making process whether the environmental or social characteristics promoted by Cherry V are met. During the holding period, Cherry V monitors and consults with its portfolio companies in order to assess whether said characteristics are continuously met.

Data sources and processing

In order to attain each of the environmental or social characteristics promoted by Cherry V Entrepreneurs through its investment in Cherry V (i.e. through the investment exclusions promoted by Cherry V to which Cherry V Entrepreneurs is a feeder vehicle), a questionnaire is completed by the (potential) portfolio companies in the course of the due diligence conducted prior to each investment made by Cherry V into portfolio companies. Moreover, during the holding period, the portfolio companies provide Cherry V with the relevant data through an ESG reporting tool implemented by Cherry Ventures on an at least annual basis for monitoring purposes. Hence, data is obtained only from the (potential) portfolio companies and no (proportion of) data is estimated or supplemented by information publicly available. An internal or external review or verification of the information obtained will be carried out if misrepresentations are suspected.

Limitations to methodologies and data

The information collected from the (potential) portfolio companies via the questionnaire as part of the due diligence carried out by Cherry V (as the investment vehicle Cherry V Entrepreneurs is a feeder vehicle to) is internally or externally verified only if and to the extent misrepresentations are suspected. Thus, it cannot be ruled out completely that false information may remain undetected in certain cases. As Cherry V’s investments (and thus Cherry V Entrepreneurs' indirect investments) are made for several years, Cherry V considers it a priority to establish and maintain a trustful working relationship with its portfolio companies in order to ensure compliance with the environmental or social characteristics promoted by Cherry V (i.e., through its investment exclusions that also apply indirectly to Cherry V Entrepreneurs). Further limitations, in particular with regard to the accuracy of the data and reliability of the data sources used, are not apparent at this time.

Due diligence

An initial assessment of how an investment relates to the environmental or social characteristics promoted by Cherry V (i.e., through its investment exclusions that also apply indirectly to Cherry V Entrepreneurs) is carried out as part of the due diligence process using a questionnaire and, where required based on the inherent ESG risk of the portfolio company, through an enhanced analysis. As a rule, purely qualitative statements of an environmental or social nature or relating to corporate governance are requested from the portfolio companies and then taken into account in the investment decision-making process. An internal or external review or verification of the information obtained will only be carried out if misrepresentations are suspected.

Engagement policies

Engagement is, in general, not part of the environmental or social investment strategy of Cherry V, and hence neither of Cherry V Entrepreneurs as a feeder vehicle to Cherry V. However, should Cherry V determine any potential issues relating to the environmental or social characteristics promoted by Cherry V, Cherry V may engage the respective portfolio companies in discussions in order to resolve, reduce or mitigate any adverse effects. Yet it remains at the sole discretion of Cherry V to determine which efforts are appropriate and proportionate in light of the size and strategic importance of the respective portfolio company as well as the transactional context.

Designated reference benchmark

No index has been designated as a reference benchmark to meet the environmental or social characteristics indirectly promoted by Cherry V Entrepreneurs through its sole investment in Cherry V as its feeder vehicle.

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