HarbourVest's Annual ESG Report

Task Force on Climate-Related Financial Disclosures Report

In 2017, the Financial Stability Board (FSB) created the Task Force on Climate-Related Financial Disclosures (TCFD) in an effort to standardize the climate-related information that companies disclose. Since its creation, the TCFD has become a widely-recognized and respected effort with over 4,000 supporting organizations from 100+ countries representing a combined market capitalization of $27 trillion.8

As global regulators increasingly consider whether, and how, they should standardize climate-related disclosure in their respective jurisdictions, institutional support has steered regulators to the TCFD as an established entity and a potentially low-friction option for integrating proposed disclosure legislation. While there has been a degree of consistency in TCFD adoption across jurisdictions, regulators have opted for a “cafeteria-style” selection of TCFD standards, leading to some inconsistency and fragmentation.9

The general adoption of climate-related disclosure legislation is a positive sign for investors because it promises to improve the availability and consistency of material climate-related information that may influence investment decisions. However, the potential piecemeal implementation of the TCFD by regulators also presents challenges for firms that invest across different regions, such as inconsistent information on potential investments and varying degrees of reporting expectations.

Fortunately, recent industry developments are focused on mitigating further fragmentation in climate disclosure regulations, and we view these more recent developments as positive for both firms and investors and support the global alignment and consistency of climate-related disclosures.

In July 2023, two key announcements were made by the International Organization of Securities Commissions (IOSCO), the hallmark association of over 230 global regulators that oversee the world’s securities and futures markets:

1. IOSCO formally endorsed the first two standards published by the International Sustainability Standards Board (ISSB) which relate to general sustainability-related financial information (IFRS S1) and climate-related disclosures (IFRS S2), respectively. In practice, this means that IOSCO has encouraged its global membership to look to the ISSB Standards as a best practice when contemplating sustainability disclosure into their local regulation.

2. Because the ISSB aligned the climate-related components of IFRS 1 and 2 to the TCFD recommendations, the FSB viewed the Standards as “the culmination of the work of the TCFD,” and transferred the monitoring and oversight of TCFD alignment by companies to the IFRS Foundation beginning in 2024. Through IOSCO’s endorsement of the ISSB, this effectively aligns the oversight of TCFD implementation more closely to global regulators.

HarbourVest’s 3rd Annual TCFD Report 

We are pleased to share the third edition of our TCFD report, highlighting our general approach, important updates, and actions taken over the past year.

The Recommendations of the TCFD provide the framework for building consistent climate disclosures. We have organized our climate change strategy in line with the four pillars of the TCFD and our corresponding commitments are:

Governance

We will articulate our position on climate change and clarify oversight and management responsibilities for that position internally.

Strategy

We will engage the senior investment team to have a meaningful discussion on the potential impact of climate change scenarios to our investment strategies.

Risk management

We will engage with GPs on the adoption of the TCFD framework to assess and manage climate-related risks. As part of our ESG Scorecard and reporting, we will begin to capture data regarding adoption amongst GPs and use this knowledge to educate and lead the industry.

Metrics and targets

We will support and collaborate with GPs on the identification of climate-related risks and target-setting for risk management.
Climate change

Governance

The first recommendation of the TCFD relates to disclosing an organization’s governance structure around climate-related risks and opportunities. Such information supports evaluations of whether material climate-related issues receive appropriate board and management attention, including disclosures relating to the role an organization’s board plays in overseeing climate-related issues as well as management’s role in assessing and managing those issues.

TCFD recommended disclosure

Describe the Board’s oversight of climate-related risks and opportunities.

HarbourVest approach

HarbourVest’s EMC is ultimately responsible for overseeing climate-related risks and opportunities in the firm’s investment and operational strategies. The EMC receives updates on an ad-hoc basis from the ESG team regarding potential climate-related topics that may impact the firm.

Through our co-CEO Peter Wilson, the EMC is also independently active in developing its understanding and engagement on the topic through involvement in the Private Equity CEO Taskforce of the Sustainable Markets Initiative (PESMIT).

Other oversight bodies also receive climate change training. In the past year, our ESG team provided Director training for HarbourVest Partners (Ireland) Limited, a private limited company authorized by the Central Bank as an AIFM that oversees HarbourVest’s European products (alternative investment funds). 

TCFD recommended disclosure

Describe management’s role in assessing and managing climate-related risks and opportunities.

HarbourVest approach

HarbourVest’s ESG Council consists of senior management across the firm and holds regular meetings throughout the year to discuss strategic ESG matters which may include the firm’s approach to identifying and managing climate-related risks and opportunities in investment portfolios.

HarbourVest’s ESG team lead is responsible for advising the EMC and ESG Council and implementing the firm’s approach to climate-related risks and opportunities into the investment process. The ESG team lead works in partnership with our investment team leads to embed and integrate climate-related considerations into the investing and diligence processes, and to provide ongoing training as the landscape develops.

Strategy

The next recommendation of the TCFD relates to disclosing the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material. This includes a description of the climate-related risks and opportunities the organization has identified over the short, medium, and long term; the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning; and the resilience of the organization’s strategy considering different climate-related scenarios, including a 2°C or lower scenario.

TCFD recommended disclosure

Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

HarbourVest approach

As reported in last year’s report, HarbourVest engaged Business for Social Responsibility (BSR) in 2021 to conduct a climate scenario analysis workshop with senior leaders. The purpose of the exercise was to understand the risks and opportunities to the business and to learn about how we can consider integrating climate considerations into our firm’s strategic planning.

In the short-term, which we identify as the next 3-7 years, we identified the need to build our internal capacity to manage climate-related risks and opportunities. This includes our resourcing, portfolio data, and integration of climate factors into our investment analysis. We are also closely tracking climate-related regulation for the investment industry which spans various regions and perspectives on the necessity to incorporate climate risk into investment decisions. HarbourVest has an opportunity in the short-term to be a value-add partner to its investors by providing data and solutions on climate-related risks and opportunities.

In the medium and long-term, which we identify as 10+ years, we believe our portfolio holdings face both risks and opportunities from a climate perspective. It is important that we continue to identify assets that may over time be at risk of being stranded during a low-carbon transition and to position our portfolios to capture the upside of the low-carbon transition.

TCFD recommended disclosure

Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.

Supplemental Guidance 1: Asset managers should describe how climate-related risks and opportunities are factored into relevant products or investment strategies.

Supplemental Guidance 2: Asset managers should also describe how each product or investment strategy might be affected by the transition to a low-carbon economy.

HarbourVest approach

At the end of the workshop with BSR, HarbourVest was presented with four main themes for the firm to consider to bolster further integration of climate considerations into our strategic priorities:

  1. Firm assets, including data, human capital, legal, regulatory and compliance infrastructure.
    • In 2022, we added a team member to our ESG team with robust background in carbon accounting.
    • In 2022, we partnered with a third-party carbon accounting firm, Persefoni, to calculate estimated GHG emissions across HarbourVest investments, using proxy emissions data based on industry averages.
  1. Fundraising, including understanding regulatory requirements and LP demand for climate-related integration or solutions.
    • In 2022, we conducted a survey of LPs to understand demand for thematic investments and found “climate change and energy transition” (81%) and “carbon neutral portfolios” (53%) were among top priorities for LPs seeking thematic ESG portfolios.
  1. Deployment, including the consideration of thematic investment opportunities in climate solutions.
    • In 2022, we structured two of our infrastructure solutions to incorporate climate-related risk mitigation and opportunity-capture measures.
    • In 2022, we further developed a new thematic co-investment strategy which addresses “environment and sustainability” as one theme.
    • In 2023, we began setting up internal infrastructure to classify GPs in our system according to their climate-related commitments.
  1. Monitoring and servicing, including tracking and reporting on climate-related risks and opportunities to investors.
    • In 2022, leveraging our new carbon emissions dataset, we produced fund-level estimated emissions reports for investors.
    • At our 2023 annual meeting, our ESG team led a break-out session titled “Positioning for the Low Carbon Transition.”
    • At our 2023 Limited Partner Advisory Committee meetings, we reviewed our emissions reporting capabilities.

TCFD recommended disclosure

Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

HarbourVest approach

As part of its exercise with BSR, HarbourVest undertook a 2030 scenario analysis to understand its risks and opportunities under different warming trajectories and subsequent market environments.

Under a 2°C or lower scenario, which assumes the economy is in an orderly transition, HarbourVest would need to be aware of its partners’ climate policies and prioritize investment in emerging sectors. HarbourVest incorporates climate metrics into its evaluation of GPs and is positioned for investing across sectors through its diversified portfolio.

Under a 3°C and higher scenario, the primary risk to HarbourVest would be its reputation and license to operate if it is perceived as contributing to the warming crisis. Under this scenario, there would likely be a fragmented regulatory market related to climate-related investment integration, which is a challenge for a global investor like HarbourVest. HarbourVest has taken concrete actions to identify and communicate our understanding of the importance of integrating climate considerations into our investment decisions such as our climate-focused fund reporting to our clients, and the preparation of an annual TCFD report. Additionally, our ESG team has a regular working relationship with our Legal, Regulatory, and Compliance team to remain aware of various regulatory regimes. 

Risk management

The third recommendation of the TCFD is to disclose how the organization identifies, assesses, and manages climate-related risk. This includes a description of the organization’s processes for each and how such processes are integrated into the organization’s overall risk management function.

TCFD recommended disclosure

Describe the organization’s processes for identifying and assessing climate-related risks.

HarbourVest approach

As an investment manager, we have identified the most significant climate-related risk to our firm to be the potential for assets in our portfolio to decline in value as a result of climate-related damage and transitions.

In an effort to mitigate this risk, our primary approach is to assess how GPs manage climate change risks and opportunities through our proprietary ESG Manager Scorecard which includes TCFD-aligned indicators. The TCFD indicators contribute to the GP’s total ESG Scorecard rating. The Scorecard also generates an individual rating on climate change strategy specifically.

Climate-specific, TCFD-aligned inputs to the scorecard include:

  • Does the GP have a climate change strategy? If not, are they committed to developing one?
  • Is the GP using (or planning to use) the TCFD framework as a means of disclosing climate risk?
  • On governance, does the GP have senior oversight and responsibility for climate change risk and TCFD objectives? Is there a climate change policy? Are there training programs in place?
  • On strategy, does the GP conduct climate risk mapping and scenario analysis?
  • On risk management, what is the GP’s approach to climate-related due diligence? Is there an engagement program in place related to climate?
  • On metrics and targets, does the GP conduct carbon footprint analysis of its portfolio?

TCFD recommended disclosure

Describe the organization’s processes for managing climate-related risks.

Supplemental guidance: Asset managers should describe how they manage material climate-related risks for each product or investment strategy.

HarbourVest approach

HarbourVest invests across multiple strategies. For primaries, our ESG Manager Scorecard is maintained as a live monitoring tool and updated regularly. The scoring data can be used to provide specific feedback to GPs on areas for improvement such as climate change, and to benchmark them to peers. For secondaries, the level of influence that HarbourVest has on managing climate-related risks depends on the structure of the transaction, with complex, concentrated transactions allowing for more engagement with the lead sponsor. For direct co-investments where we have company board or observer seats, HarbourVest representatives may engage with our lead GPs to increase discussion around ESG topics, including related to climate.

Across the sectors we invest into, HarbourVest has identified our investments in infrastructure and real assets as having the most potential climate-related risk. As such, we have begun to implement parameters within this strategy that promote investment in transition industries.

TCFD recommended disclosure

Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.

HarbourVest approach

ESG due diligence, including ESG Manager Scorecards (which incorporate climate change assessments) for most strategies, is incorporated as standard into the Investment Committee (IC) materials before the Decision Required stage. The ESG lead(s) on the investment teams provide oversight of ESG due diligence discussions and deal leads can call upon the ESG team to provide advice on any matters that prompt IC-level discussion.

Metrics and targets

The final recommendation of the TCFD is to disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. This includes:

  • A description of the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management processes.
  • Disclosure of Scope 1, Scope 2, and Scope 3 GHG emissions and the related risks.
  • The targets used by the organization to manage climate-related risks and opportunities and performance against targets.

TCFD recommended disclosure

Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.

Supplemental guidance 1: Asset managers should describe metrics used to assess climate-related risks and opportunities in each product or investment strategy. Where relevant, asset managers should also describe how these metrics have changed over time. Where appropriate, asset managers should provide metrics considered in investment decisions and monitoring.

Supplemental guidance 2: Asset managers should describe the extent to which their assets under management and products and investment strategies, where relevant, are aligned with a well below 2°C scenario, using whichever approach or metrics best suit their organizational context or capabilities. Asset managers should also indicate which asset classes are included.

HarbourVest approach

Through its evaluation of GPs using the ESG Manager Scorecard and corresponding climate-related KPIs, HarbourVest has begun collecting datapoints pertaining to our universe of GPs and their approach to managing climate-related risks and opportunities in their investment processes.

This includes the following KPIs for 2022:

  • GPs with a developed climate change strategy: 29%
  • GPs committed to developing a climate change strategy: 33%
  • GPs with TCFD-aligned disclosures: 6%
  • GPs that have conducted climate risk mapping of the portfolio: 16%
  • GPs that conduct carbon footprint analysis of portfolios: 20%

TCFD recommended disclosure

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions, and the related risks.

Supplemental guidance: Asset managers should disclose GHG emissions for their assets under management and the weighted average carbon intensity (WACI) for each product or investment strategy, where data and methodologies allow. These emissions should be calculated in line with the Global GHG Accounting and Reporting Standard for the Financial Industry developed by the Partnership for Carbon Accounting Financials (PCAF Standard) or a comparable methodology. In addition to WACI, asset managers should consider providing other carbon footprinting metrics they believe are useful for decision-making.

HarbourVest approach

Since 2020, HarbourVest has actively measured its own operational carbon emissions. In 2022, HarbourVest produced 5,699 market-based tons of carbon dioxide equivalent (tCO2e) across scopes 1, 2 and 3 emissions. The majority of the emissions include business travel, purchased goods & services (material use), and waste disposal. Our 2022 emissions are broken out by scope below:

Scope 1 = 18 tCO2e

Scope 2 = 442 tCO2e

Scope 3 = 5,239 tCO2e

In 2022, we partnered with a third-party carbon accounting firm, Persefoni, to annually calculate estimated GHG emissions across HarbourVest investments, using proxy emissions data based on industry averages. In 2023, we supplemented our estimated emissions dataset for 2022 with reported emissions data from companies (where available). The breakdown of our financed emissions by scopes 1, 2 and 3 are included below:

Scope 1 = 38%

Scope 2 = 7%

Scope 3 = 55%

The reporting is on estimated financed emissions data, which is HarbourVest’s share (“attributed emissions”) of the emissions related to the fund investments. Financed emissions are the emissions generated as a result of financial services, investments and lending by investors, and companies that provide financial services. These types of emissions fall under scope 3, category 15, of the Greenhouse Gas Protocol.

Our financed emissions are calculated using the Partnership for Carbon Accounting Financials (PCAF). The PCAF standards are aligned with the Greenhouse Gas Protocol (the most widely used international carbon accounting standard). Our reporting of the emissions data is aligned with the iCI-ERM GHG accounting and reporting guidance for private equity which “translated” these standards for private equity practitioners into practical guidance.

Using this data, we published GHG Financed Emissions Reports for certain investment strategies in 2022. In our 2023 GHG Emissions Reports, we added the most recent financed emissions data for our clients’ benchmarking purposes, as well as the Weighted Average Carbon Intensity as a new metric.

TCFD recommended disclosure

Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

HarbourVest approach

Over the past year, corresponding to our primary approach to managing risk with our ESG Scorecard, we have seen improvement toward each of our continuous targets including:

  1. Increasing the number of GPs evaluated on efforts related to climate change.
  2. Improving the benchmark climate change score, which represents industry-wide progress on the management of climate factors in the portfolio.
  3. Improving the quality of our emissions dataset with reported emissions data supplementing estimated emissions.

Professional Investor Definition

“Professional Investor” under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the “SFO”) and its subsidiary legislation) means:

(a) any recognised exchange company, recognised clearing house, recognised exchange controller or recognised investor compensation company, or any person authorised to provide automated trading services under section 95(2) of the SFO;

(b) any intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong;

(c) any authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(d) any insurer authorized under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong), or any other person carrying on insurance business and regulated under the law of any place outside Hong Kong;

(e) any scheme which-

(i) is a collective investment scheme authorised under section 104 of the SFO; or

(ii) is similarly constituted under the law of any place outside Hong Kong and, if it is regulated under the law of such place, is permitted to be operated under the law of such place,

or any person by whom any such scheme is operated;

(f) any registered scheme as defined in section 2(1) of the Mandatory Provident Fund Schemes Ordinance (Cap. 485 of the Laws of Hong Kong), or its constituent fund as defined in section 2 of the Mandatory Provident Fund Schemes (General) Regulation (Cap. 485A of the Laws of Hong Kong), or any person who, in relation to any such registered scheme, is an approved trustee or service provider as defined in section 2(1) of that Ordinance or who is an investment manager of any such registered scheme or constituent fund;

(g) any scheme which-

(i) is a registered scheme as defined in section 2(1) of the Occupational Retirement Schemes Ordinance (Cap. 426 of the Laws of Hong Kong); or

(ii) is an offshore scheme as defined in section 2(1) of that Ordinance and, if it is regulated under the law of the place in which it is domiciled, is permitted to be operated under the law of such place,

or any person who, in relation to any such scheme, is an administrator as defined in section 2(1) of that Ordinance;

(h) any government (other than a municipal government authority), any institution which performs the functions of a central bank, or any multilateral agency;

(i) except for the purposes of Schedule 5 to the SFO, any corporation which is-

(i) a wholly owned subsidiary of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(ii) a holding company which holds all the issued share capital of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong; or

(iii) any other wholly owned subsidiary of a holding company referred to in subparagraph (ii); or

(j) any person of a class which is prescribed by rules made under section 397 of the SFO for the purposes of this paragraph as within the meaning of this definition for the purposes of the provisions of the SFO, or to the extent that it is prescribed by rules so made as within the meaning of this definition for the purposes of any provision of the SFO.

The first of such classes of additional “professional investor”, under the Securities and Futures (Professional Investor) Rules (Cap. 571D of the Laws of Hong Kong), are:

(k) any trust corporation (registered under Part VIII of the Trustee Ordinance (Cap. 29 of the Laws of Hong Kong) or the equivalent overseas) having been entrusted under the trust or trusts of which it acts as a trustee with total assets of not less than HK$40 million or its equivalent in any foreign currency at the relevant date (see below) or-

(i) as stated in the most recent audited financial statement prepared-

(A) in respect of the trust corporation; and

(B) within 16 months before the relevant date;

(ii) as ascertained by referring to one or more audited financial statements, each being the most recent audited financial statement, prepared-

(A) in respect of the trust or any of the trust; and

(B) within 16 months before the relevant date; or

(iii) as ascertained by referring to one or more custodian (see below) statements issued to the trust corporation-

(A) in respect of the trust or any of the trusts; and

(B) within 12 months before the relevant date;

(l) any individual, either alone or with any of his associates (the spouse or any child) on a joint account, having a portfolio (see below) of not less than HK$8 million or its equivalent in any foreign currency at the relevant date or-

(i) as stated in a certificate issued by an auditor or a certified public accountant of the individual within 12 months before the relevant date; or

(ii)  as ascertained by referring to one or more custodian statements issued to the individual (either alone or with the associate) within 12 months before the relevant date;

(m) any corporation or partnership having-

(i) a portfolio of not less than HK$8 million or its equivalent in any foreign currency; or

(ii) total assets of not less than HK$40 million or its equivalent in any foreign currency, at the relevant date, or as ascertained by referring to-

(iii) the most recent audited financial statement prepared-

(A) in respect of the corporation or partnership (as the case may be); and

(B) within 16 months before the relevant date; or

(iv) one or more custodian statements issued to the corporation or partnership (as the case may be) within 12 months before the relevant date; and

(n) any corporation the sole business of which is to hold investments and which at the relevant date is wholly owned by any one or more of the following persons-

(i) a trust corporation that falls within the description in paragraph (k);

(ii) an individual who, either alone or with any of his or her associates on a joint account, falls within the description in paragraph (k);

(iii) a corporation that falls within the description in paragraph (m);

(iv) a partnership that falls within the description in paragraph (m).

For the purposes of paragraphs (k) to (n) above:

  • “relevant date” means the date on which the advertisement, invitation or document (made in respect of securities or structured products or interests in any collective investment scheme, which is intended to be disposed of only to professional investors), is issued, or possessed for the purposes of issue;
  • “custodian” means (i) a corporation whose principal business is to act as a securities custodian, or (ii) an authorised financial institution under the Banking Ordinance (Cap. 155 of the Laws of Hong Kong); an overseas bank; a corporation licensed under the SFO; or an overseas financial intermediary, whose business includes acting as a custodian; and
  • “portfolio” means a portfolio comprising any of the following (i) securities; (ii) certificates of deposit issued by an authorised financial institution under the Banking Ordinance (Cap, 155 of the Laws of Hong Kong) or an overseas bank; and (iii) except for trust corporations, cash held by a custodian.

Institutional Investor / Accredited Investor Definition

An institutional investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(a) the Singapore Government;

(b) a statutory board as may be prescribed by regulations made under section 341 of the SFA, as prescribed in the Second Schedule of the Securities and Futures (Classes of Investors) Regulations 2018;

(c) an entity that is wholly and beneficially owned, whether directly or indirectly, by a central government of a country and whose principal activity is —

(i) to manage its own funds;

(ii) to manage the funds of the central government of that country (which may include the reserves of that central government and any pension or provident fund of that country); or

(iii) to manage the funds (which may include the reserves of that central government and any pension or provident fund of that country) of another entity that is wholly and beneficially owned, whether directly or indirectly, by the central government of that country;

(d) any entity —

(i) that is wholly and beneficially owned, whether directly or indirectly, by the central government of a country; and

(ii) whose funds are managed by an entity mentioned in sub‑paragraph (c);

(e) a bank that is licensed under the Banking Act 1970;

(f) a merchant bank that is licensed under the Banking Act 1970;

(g) a finance company that is licensed under the Finance Companies Act 1967;

(h) a company or co‑operative society that is licensed under the Insurance Act 1966 to carry on insurance business in Singapore;

(i) a company licensed under the Trust Companies Act 2005;

(j) a holder of a capital markets services licence;

(k) an approved exchange;

(l) a recognised market operator;

(m) an approved clearing house;

(n) a recognised clearing house;

(o) a licensed trade repository;

(p) a licensed foreign trade repository;

(q) an approved holding company;

(r) a Depository as defined in section 81SF of the SFA;

(s) a pension fund, or collective investment scheme, whether constituted in Singapore or elsewhere;

(t) a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors;

(u) a designated market‑maker as defined in paragraph 1 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations;

(v) a headquarters company or Finance and Treasury Centre which carries on a class of business involving fund management, where such business has been approved as a qualifying service in relation to that headquarters company or Finance and Treasury Centre under section 43D(2)(a) or 43E(2)(a) of the Income Tax Act 1947;

(w) a person who undertakes fund management activity (whether in Singapore or elsewhere) on behalf of not more than 30 qualified investors;

(x) a Service Company (as defined in regulation 2 of the Insurance (Lloyd’s Asia Scheme) Regulations) which carries on business as an agent of a member of Lloyd’s;

(y) a corporation the entire share capital of which is owned by an institutional investor or by persons all of whom are institutional investors;

(z) a partnership (other than a limited liability partnership within the meaning of the Limited Liability Partnerships Act 2005) in which each partner is an institutional investor.

An accredited investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(i)  an individual —

(A) whose net personal assets exceed in value $2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(B) whose financial assets (net of any related liabilities) exceed in value $1 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount, where “financial asset” means —

(BA) a deposit as defined in section 4B of the Banking Act 1970;

(BB) an investment product as defined in section 2(1) of the Financial Advisers Act 2001; or

(BC) any other asset as may be prescribed by regulations made under section 341; or

(C) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(ii)  a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —

(A) the most recent audited balance sheet of the corporation; or

(B) where the corporation is not required to prepare audited accounts regularly, a balance sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance sheet, which date must be within the preceding 12 months;

(iii) A trustee of a trust which all the beneficiaries are accredited investors; or

(iv) A trustee of a trust which the subject matter exceeds S$10 million; or

(v) An entity (other than a corporation) with net assets exceeding S$10 million (or its equivalent in a foreign currency) in value. “Entity” includes an unincorporated association, a partnership and the government of any state, but does not include a trust; or

(vi) A partnership (other than a limited liability partnership) in which every partner is an accredited investor; or

(vii) A corporation which the entire share capital is owned by one or more persons, all of whom are accredited investors.

Continuation solutions encompass a host of transaction types in which a GP secures interim liquidity and/or additional primary capital for their LPs in a strongly performing asset, or set of assets, that the GP will continue to own and control. Specifically, they include continuation funds, new funds created by GPs for the purpose of acquiring the asset(s) that continue to be managed by the same GP and capitalized by one or several secondary buyers, or equity recapitalizations involving a direct equity or structured equity investment into a portfolio company. These transactions can also include a parallel investment from the GP’s latest fund into that same pool of assets (a “cross-fund trade”).