Sustainable, Responsible &/or ESG Policy:

The specific targeted impacts are key positive societal benefits or real-world outcomes resulting from the investment activities performed by the Investment Manager for the purpose of delivering the desired impact, namely:

Enabling improved outcomes in health through activities that:

• Create more facilities, beds and capacity for health-related services
• Deliver facilities for health services in locations where there is an identified unmet need and/or underserved people
• Provide fit-for-purpose facilities enabling the effective delivery of the health service

Enabling improved outcomes in housing through activities that:

• Increase specialist housing capacity, being housing that is designed for a specific group of people, such as those who are disabled, vulnerable and/or elderly
• Deliver homes for the above user groups in locations where there is an identified unmet need and/or underserved people
• Provide fit-for-purpose housing for individuals, with better access to support services for those vulnerable user groups

Enabling improved outcomes in education through activities that:

• Create more facilities and places for educational services
• Deliver facilities for educational services in locations where there is an identified unmet need and/or underserved people
• Provide fit-for-purpose facilities enabling the effective delivery of the educational service

These sectors and assets may be in either/or the public and private sector.

“Social Infrastructure Assets” are UK property assets which provide health services, housing, and education. Property assets are typically freehold or long-term leasehold property assets or other infrastructure assets which are let to providers of services within the sectors. The assets targeted by the Fund are typically let on long-term leases (with initial leasehold terms in excess of 15 years) and are expected to provide investors with a secure long-term, inflation-correlated income stream and capital growth, whilst generating a positive social impact. Social Infrastructure Assets may also include other collective investment schemes which meet the Objective.

Through increasing the access to Social Infrastructure Assets there is the risk of unintended negative outcomes. These include negative environmental impacts that can occur during the construction, refurbishment and/or operation of property, such as increased emissions or energy usage. There are also potential negative social impacts that can occur, which include the impact new Social Infrastructure Assets and the services provided can have on existing services in the area, the risk that the services provided are sub-standard or that the rent received from through the provision of Social Infrastructure Assets is too high which puts the underlying services at risk.

The pursuance of the sustainability objective is not expected to have any material effect on the financial risk and return of the Fund. By investing in investments that promote positive social impact, the composition of the Fund may be significantly different to other portfolios, especially those not trying to achieve a social objective.

Process:

The Sustainability Objective is fully integrated into the investment process, from initial appraisal through to the Investment Committee and ongoing management. Our commitments are:

• To seek to identify, measure and manage ESG-related risks, and where possible, benefits
• To incorporate sustainability in our engagement with stakeholders
• To continuously seek improvement in our ability to gather and disclose relevant data
• To promote a culture focused on sustainability
• To constantly consider and report our progress on sustainability issues.

The Investment Manager selects assets for inclusion in the portfolio to meet the sustainability objective. As set out in the Investment policy, at least 70% of the Gross Asset Value of the Fund must be invested in Social Infrastructure Assets.

The Investment Manager reflecting the Theory of Change and the challenges identified, seeks opportunities and locations across Health, Housing and Education where there is an unmet demand or underserved population. The Investment Manager assesses the opportunities, as to how it will address the challenges looking at aspects such as

• Suitability of location
• Design of the buildings and is it fit for purpose
• Operator/Tenant quality (operational capability, financial and reputational)

The Investment Manager will then test each prospective asset against the following criteria to determine whether or not they are supporting the Sustainability Objective. The information on the asset is recorded in a scorecard with other key data and assessed by the Investment Committee as part of the acquisition process. An asset must meet both tests to qualify for prospective and continuing investment:

(A)        Additionality impact rating: This criteria seeks to assess what specific contribution the asset can make in delivering the social outcomes set out in the sustainability objective and which would not be provided but for the Fund’s investment.  Any additionality is regarded as positive but can also be categorised into a “High” “Medium” and “Low” rating by asset to assess the delivery of positive additionality for end users, specifically in locations where there is an identified unmet demand and/or underserved groups. This is delivered through new and/or refurbished buildings (often change of use) in a location where there is under provision of fit-for-purpose facilities. Whilst additionality will be maximised there is no requirement for specific allocations by additionality rating, as long as there is absolute positive additionality.

The Investment Manager working with a third-party advisor, using the guidelines included in the Impact Management Project (Place Based Impact Investing Reporting Framework Guidance 2023 (“Framework”)), has allocated an additionality rating (which is a measure of contribution to a targeted impact and improved outcome) to various investment categories. This categorisation is then allocated to individual investments as part of the investment process and then monitored.

(B)        Impact classifications:  Each of the in-scope Social Infrastructure Assets will be allocated an impact category, using the Framework. The Fund Investment Manager has worked with a third-party advisor in seeking to define classification guidelines to various investment scenarios. Specifically, the assets are classified into one of the following categories under the Framework:

• Does cause harm,
• May cause harm,
• Act to avoid harm,
• Benefit Stakeholders, or
• Contribute to solutions.

Only those prospective assets with a categorisation of  “Benefit Stakeholders” or “Contribute to Solutions” under the Framework are considered for investment under the Sustainability Objective.

This categorisation is then allocated to individual investments as part of the investment process and then monitored.

SDR Labelling:

Unlabelled - promotes sustainable characteristics (has CFD)

SDR Literature:

• Consumer Facing Disclosure