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Nordic Credit Partners

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Nordic Credit Partners’ objective is to capitalise on the growing Nordic corporate high yield bond market. We invest in well-diversified leveraged portfolios of Nordic corporate high yield bonds in mature and well-established industries targeting to achieve an attractive, stable risk-adjusted return over time.

The portfolios are composed through a tailored 'bond-picking' buy-and-hold strategy with strict cash flow focus and we always aim to remain invested until maturity. We seek companies with significant asset base, proven track-record and professional management/owners.

Investment decisions are taken based on a thorough due diligence process including ESG factors. Strict investment criteria and continuous portfolio monitoring minimises default risk of each investment and broad diversification across industries, regions and risk levels reduces risk in overall portfolio. ESG considerations are made throughout the investment process and unanimous approval is required by the Board of Directors for all investment decisions.

Nordic Credit Partners applies the UN Global Compact’s Ten Principles in the investment process and are signtories to the Principles for Responsible Investment (PRI). We also refrain from investments i oil, gas, oil service companies, thermal coal, tobacco, gambling, pornography, alchocol and controversial and military weapons.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Nordic Credit Partners’ motivation for considering ESG factors in the investment process is a combination of internal ethical values and our clients’ values and preferences. It is also our conviction that companies with a structured approach to sustainability become more successful in the long term and thus will be more attractive investments with lower default risk. The aim of our business is to create long-term value from an economic, social and environmental perspective. This we do by implementing the following processes:

  • Incorporating ESG information: NCP has developed its proprietary Sustainable Return Model (SRM), built on sustainability analysis across four pillars: Market, Operations, Financing and ESG. The SRM framework serves as a basis for the due diligence process, focusing on sustainability across all four pillars.
  •  Screenings
    • Norm-based screenings: to capture companies which engage in activities that violate international guidelines and conventions. 
    • Sector screenings: to exclude investments in companies operating in specific sectors or business areas that are deemed to meet major sustainability challenges.
  • Positive selection: We attach great importance to identifying and seeking exposure to important sustainability themes. By integrating sustainability into our investment’s thesis, we believe that we will benefit our long-term investors and contribute to the development of sustainability in society at large. We have a process for integrating sustainability into all types of investments we do, and we are especially looking for companies that actively reduce environmental impact such as carbon emissions, water utilization and handling toxic waste.
  • Engagement: The companies we invest in are typically in the small to midcap segment and as such we can have a direct access to management. If we have identified any issues in the due diligence phase or portfolio companies, we will seek answers from the company and for them to take action. Issues that can be addressed include management, risks and opportunities related to the environment, social aspects and business ethics. If we do not receive a satisfactory response or the company does not show a willingness to change, we may choose to divest the holding. 

 

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].

Our intention is to publicly disclose our Sustainability Framework in 2020.


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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