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Information on the complaints procedure for private investors in HEP Kapitalverwaltung AG’s mutual funds (pursuant to section 28(2) KAGB, section 4(3) sentence 4 KAVerOV):

HEP Kapitalverwaltung AG has introduced a procedure for the appropriate and prompt handling of complaints within the company and has anchored this in its corporate processes. With its complaints management system, HEP Kapitalverwaltung AG fulfills legal requirements on the one hand, and on the other, active complaints management is an important concern of HEP Kapitalverwaltung AG for increasing customer satisfaction and continuously improving internal operational processes.

We are constantly developing our processes and also use the information we receive to continuously optimize our processes and procedures.

If you are not satisfied with us and have cause for a complaint, you can submit it to us by telephone, e-mail, post or via the contact form or submit it directly to us.

You will then be informed within a reasonable period of time about the receipt of your complaint and the further procedure for dealing with your complaint. We will ensure that your complaint is dealt with promptly.

The lodging of complaints is free of charge. Please understand that your complaint can only be processed if it is submitted in German.

HEP Kapitalverwaltung AG

Anlegerbetreuung/Beschwerdemanagement

Römerstraße 3

Telefon: +49 (0) 7135 93446–0

E-Mail: info@hep.global

HEP Kapitalverwaltung AG (KVG) initiates and manages closed-end alternative investment funds (AIF) for private and institutional investors. We work with a large number of external contractual partners and affiliated companies along the entire value chain of an AIF. This can lead to conflicting interests within and between the individual business divisions, other companies in the hep-global Group, external business partners, managers and employees of the KVG as well as the managed AIFs and their investors.

By introducing appropriate measures to avoid conflicts of interest, or where these cannot be avoided by identifying, monitoring, disclosing and, if necessary, resolving these conflicts of interest, potential conflicts can be identified at an early stage and handled fairly or avoided where possible.

Conflicts of interest must be resolved in such a way that the AIFs managed by HEP Kapitalverwaltung AG and their investors are treated fairly, the investors are not exposed to any risk of damage and extraneous interests do not influence the decisions of our employees.

HEP Kapitalverwaltung AG has taken organizational measures to avoid, eliminate or mitigate potential or actual conflicts of interest with the aim of ensuring this as a minimum standard.

In particular, this includes a clear internal separation of functions – both at management and employee level – constant monitoring of all of the KVG’s business activities by the risk management and compliance departments and ongoing monitoring by the internal audit department. Details of these measures will be made available to investors free of charge upon request.

To ensure that these standards are adhered to, we work continuously to actively identify and manage conflicts of interest at an early stage and with foresight in order to avoid any kind of apparent or actual misconduct.

Should unavoidable conflicts nevertheless arise, these are resolved while safeguarding the interests of the investors and the fund company. In the event of conflicts with the interests of third parties, these must be resolved in favor of the interests of the investors and the AIF.

We will disclose unavoidable conflicts of interest to investors in the respective sales documents.

Legal basis

HEP Kapitalverwaltung AG (also “HEP-KVG”) is an AIF capital management company (“AIF-KVG”) and was granted permission to operate as an external capital investment company on January 24, 2018 in accordance with Section 20 / Section 22 of the German Capital Investment Code (“KAGB”). § Section 37 KAGB requires capital management companies to define and apply a remuneration system. The requirements for this are defined in more detail by Article 13 and Annex II of Directive 2011/61/EU and the guidelines of the European Securities and Markets Authority (“ESMA “) for sound remuneration policies taking into account the AIFMD of July 3, 2013 (“ESMA Guideline”).

Objective and standards

In accordance with these requirements, HEP-KVG’s remuneration policy is designed to avoid false incentives, particularly for employees who decide whether to take risks (including sustainability risks). HEP-KVG’s remuneration policy should promote sound and effective risk management, not encourage the assumption of inappropriate risks and prevent conflicts of interest (No. 1a and b, Annex II of Directive 2011/61/EU). To this end, HEP-KVG has implemented a remuneration guideline, excerpts of which are reproduced in this document.

Scope of application

The Remuneration Policy applies to all employees of HEP-KVG. HEP-KVG uses outsourcing agreements or guidelines to ensure that the outsourcing companies that provide services for HEP-KVG also comply with the guidelines and specifications of HEP-KVG and the legal provisions. Alternatively, the outsourcing company’s remuneration practices are reviewed to ensure that there are no inappropriate incentive systems for risk-taking.

The remuneration policy requirements also apply to employees of outsourcing companies whose activities have a significant influence on the risk profile of the alternative investment funds (“AIF”) managed by HEP-KVG.

Male function and job titles in this document are to be understood as gender-independent.

Covered employees

Covered employees are employees of HEP-KVG who have a material influence on the risk profile of HEP-KVG or on the AIFs it manages and who belong to one of the categories described below:

• Management, as well as members of the management body of HEP-KVG who are involved in the management and members of the management body of HEP-KVG who are not involved in the management;
• Risk takers and employees with control functions;
• Employees who receive total remuneration that puts them in the same income bracket as members of the Executive Board and risk takers whose activities have a material impact on the risk profiles of HEP-KVG or the AIFs they manage;
• Other risk takers, such as employees whose professional activities individually or collectively as members of a group (e.g. a unit or part of a department) have a material impact on the risk profile of HEP-KVG or an AIF managed by it, including persons who are in a position to enter into contracts/positions and make decisions that have a material impact on the risk positions of HEP-KVG or an AIF managed by it.

The management of HEP-KVG examines on a case-by-case basis which divisions and which employees of HEP-KVG are covered by the remuneration policy apart from the Executive Board and records this in writing. The corresponding list is reviewed on an ad hoc basis, but at least once a year, and adjusted if necessary.

Principle of proportionality

General
The requirements for the remuneration system and, in particular, the payment process for variable remuneration are subject to the principle of proportionality. According to the principle of proportionality, special criteria can be taken into account with regard to the identified employees when structuring the variable remuneration within an AIF-KVG. These special criteria include the size, internal organization and the type, scope and complexity of their business. This allows flexibility in the design of the remuneration system and in particular the variable remuneration.

Non-application of individual requirements to the payout process

In accordance with HEP-KVG’s remuneration policy, some of the requirements of the remuneration system are therefore not applied, taking into account the principle of proportionality. The appropriateness of this waiver is explained below.

HEP-KVG criteria

HEP-KVG applies the principle of proportionality in accordance with the ESMA Guidelines, No. 23 et seq. In particular, HEP-KVG applies the remuneration principles and standards in accordance with the following criteria pursuant to No. 29 of the ESMA Guidelines:

• Non-complex internal organization of HEP-KVG and the AIFs it manages
• The AIFs managed by HEP-KVG invest at various stages in the field of renewable energies (photovoltaics) in order to ensure an appropriate return for investors in relation to the risk they take. The business activities are largely standardized and characterized by a low degree of complexity.
• If necessary, the scope of the licence will be extended to include real estate, as owners are increasingly seeking to sell their land. A low level of complexity is also expected here. HEP KVG provides portfolio management and risk management and does not perform any ancillary activities that require complex organisational processes.
• There is no complex investment management with systemic significance for HEP-KVG and the AIFs it manages, as is the case in selected areas of securities trading and investments.
• The risk profiles of mutual funds are fixed from the outset; once an investment decision has been made, it is generally retained.
• The scope of business should also be expanded to a minor extent as an investment advisor for other AIFMs, as there is a very deep understanding of the photovoltaic value chain. According to the current status, the content risk should correspond to the risk profile of the own managed investment assets.
• In addition, it is planned to develop mandate business (separate accounts) in the institutional segment. Here too, action should be taken based on the risk profile of the investment funds already managed.

Remuneration policy

General
All employees (covered and non-covered) of HEP-KVG receive fixed salaries in line with the market and, under certain circumstances, additional fixed special payments, which are subject to regular review, as well as performance-related variable remuneration where this is granted. The fixed salaries and the variable remuneration – if such is granted – of the employees covered are in an appropriate relationship to each other and the proportion of the fixed salary in the total remuneration is sufficiently high so that the payment of variable remuneration can also be waived entirely. HEP-KVG’s remuneration policy is regularly reviewed to ensure that remuneration is in line with effective risk management, the business strategy, the objectives, values and interests of HEP-KVG and the AIFs it manages and the investors in the AIFs. Remuneration arrangements must not encourage conflicts of interest.

Variable remuneration

Variable remuneration is additional payments or benefits that are determined on the basis of performance criteria or, in certain cases, other contractual criteria.

Rules for determining the entitlement to and the amount of variable remuneration

The amount of variable remuneration is generally based on an individual performance assessment, taking into account the individual performance of the employee and their specialist department or the relevant AIF as well as the overall result of HEP-KVG. Guaranteed variable remuneration is only paid in exceptional cases in connection with the recruitment of a new employee and is limited to the first year of employment. The performance assessment is based on the following principles:

• The assessment period covers at least the relevant financial year
• The assessment of individual performance must take into account financial and non-financial criteria
• Employees with control functions are assessed independently of the performance of the business areas they control.
• The appraisal should be carried out annually by the line manager as part of the individual target agreement discussion and the results should be recorded in writing in the target agreement sheet.

Rules on the payment of variable remuneration

Due to its small size, the non-complexity of its organization and the nature, scope and complexity of its business, in particular due to the illiquidity of its assets, HEP-KVG assumes a very low risk that the granting of variable remuneration components will create incentives for decisions that could have a detrimental effect on the interests of the individual AIFs and their investors. The following principles therefore apply to the payment of variable remuneration:

• Variable remuneration of the employees covered is deferred in the amount of 40%. The portion of the variable remuneration not deferred can be paid out as a deduction at the end of the assessment period. The deferred portion is paid out in equal installments over a deferral period of four years, whereby the first installment is not paid out until one year after the end of the assessment period.
• The employees covered are not entitled to the deferred portion of the variable remuneration during the deferral period, but are entitled to a proper calculation of the respective portion to be paid out.
• The entitlement to the variable remuneration of the employees covered from previous financial years may lapse under the following conditions:
  • evidence of misconduct or serious errors by the covered employee (e.g. breach of any code of conduct or other internal rules, in particular in connection with risks),
  • if one or more AIFs and/or HEP-KVG and/or the business unit has suffered a significant deterioration in its financial situation,
  • if one or more AIF and/or HEP-KVG and/or the business unit of the covered employee has suffered a material failure of risk management.
• HEP-KVG therefore reviews the occurrence of these conditions during the deferral period and at the end of the deferral period before paying out a portion of the deferred variable remuneration and adjusts the variable remuneration, including the non-deferred portion, to “zero” if necessary (ex-post risk adjustment). The adjustment is to be implemented by means of malus or clawback agreements.
• If the payout amount is less than EUR 50,0000, the HEP KVG does not assume that there is an inappropriate incentive for the risk profile. Payout amounts below this exemption limit are therefore paid out directly.
• Due to the small size, non-complexity of its organization and the nature, small scale and low complexity of HEP-KVG’s business, HEP-KVG does not apply the following requirements to the payout process in accordance with paragraphs 26 to 28 of the ESMA Guidelines:
  • The granting of variable remuneration in the form of instruments,
  • the setting of a vesting period.
• HEP-KVG will document the allocation process for variable remuneration and archive these documents.
• Covered employees may not take out insurance policies that protect them against financial loss from malus or clawback agreements.
• Remuneration from mandates within HEP-KVG’s sphere of influence is offset against the variable remuneration.

Payments in the event of early termination of a contract

Agreements on payments in connection with the premature termination of a contract are aimed at the services rendered up to the premature termination of the contract and are designed in such a way that failure is not rewarded.

Pension arrangements

• HEP-KVG grants retirement benefits in line with market conditions.
• If voluntary retirement benefits are granted as part of variable remuneration, they are subject to a performance assessment and an ex-post risk adjustment in accordance with the regulations on the payment of variable remuneration before they are paid out.

Remuneration committee

The ESMA guidelines allow the waiver of a remuneration committee due to the principle of proportionality. HEP-KVG makes use of this option. The need to establish a Remuneration Committee is reviewed and assessed by the Executive Board as part of the annual review of the Remuneration Policy based on the thresholds set out in the guidelines and other factors such as internal organization, type and scope and complexity of HEP-KVG’s business.

Determination of and compliance with the remuneration policy

The Remuneration Policy is determined by the Supervisory Board of HEP-KVG for the Executive Board of HEP-KVG and by the Executive Board of HEP-KVG for the other employees covered by approving/adopting this Remuneration Policy.

The Supervisory Board reviews the appropriateness of the remuneration guideline annually on the basis of HEP-KVG’s objectives set out in the strategies and documents this in writing in the minutes of the Supervisory Board meeting.

A review is carried out at least once a year (compliance) to determine whether the remuneration policy defined in the Remuneration Policy has been implemented. The results of the review are recorded in a compliance report.

Note:

The following description of investor rights cannot serve as the sole basis for an investment decision in an investment company. The investor rights described below may be affected in particular by the risks described in the respective sales documents. Investors should therefore base an investment decision on an examination of the sales prospectus or information document and the key investor information.

I. Characteristics of the units:
The type of units in the investment company are limited partnership units.
In the case of public AIFs, investors can initially only participate in the investment company indirectly as trustors via the limited partner in trust. The limited partner in trust acquires and holds the limited partner’s share of the respective investor in his own name, but in the economic interest and for the account of the investors. The limited partner in trust exercises the shareholder rights for the trustors at its own discretion.

The main features of the investors’ shares and thus the rights and obligations associated with the investment are the right to participate in profits and assets (including liquidation proceeds), the voting rights in the shareholders’ meeting or in the written circulation procedure in relation to the investment company and the information and control rights set out in the articles of association and, where applicable, the trust agreement, as summarized below and described in detail in the articles of association of the investment company.

1) Profit participation, withdrawals and liquidity surplus
The investors participate in the profits and losses generated by the Investment Company in accordance with the amount of their respective investment. Insofar as the Investment Company has free liquidity and the Investment Company does not require this as an appropriate liquidity reserve in the opinion of HEP Kapitalverwaltung AG, this unneeded liquidity is distributed to the shareholders.

If an investor withdraws from the investment company in exceptional circumstances (e.g. for good cause), he is generally entitled to a settlement.

Voting rights, shareholders’ meetings and resolutions
Investors can use their voting rights under company law to influence the decisions of the investment company to a limited extent by exercising these voting rights at shareholder meetings. Resolutions on certain issues, such as the approval of distributions and withdrawals, are passed at these shareholder meetings. As a rule, shareholder meetings are held by way of a written resolution procedure; shareholder resolutions are generally passed with a simple majority of the votes cast.

2) Rights to information, inspection and control
As shareholders, investors have the right to request information from the general partner or the managing limited partner about the affairs of the investment company. If they do not comply with a shareholder’s request for information within a reasonable period of time or if there are other important reasons, the shareholders are entitled to inspect the company’s trading books and papers themselves at the registered office of the Investment Company during normal office hours.

II. Instruments of collective redress
Investors are entitled to make use of collective redress instruments. In Germany, the following instruments of collective redress are available as legal proceedings:

1) The civil procedural model declaratory action pursuant to Sections 606 et seq. of the Code of Civil Procedure;

2) The capital investor test case in accordance with the Capital Investor Test Case Act (“KapMuG”).

Re 1.): With the model declaratory action under civil procedure law, “qualified entities” – thus not directly an investor himself – can have the existence or non-existence of the requirements for the existence or non-existence of claims or legal relationships between consumers and an entrepreneur determined in court. Investors in the investment company who are also consumers may file claims or legal relationships that depend on the objectives of the model declaratory judgment action for entry in the register of actions up to the end of the day before the start of the first hearing. In this case, the model declaratory judgment shall also apply to any legal disputes between the investment company and the investor who has registered his claims or legal relationships in the register of claims.

Investors can view notices of any model declaratory actions against the investment company at the following link of the Federal Office of Justice: https://www.bundesjustizamt.de/DE/Themen/Buergerdienste/Klageregister/Allgemein es_node.html

Re 2.) The KapMuG is admissible for damages suffered by investors due to false, misleading or omitted public capital market information (such as in a sales prospectus in accordance with the German Capital Investment Code). The applicant must demonstrate that the decision in the test case may have significance beyond the individual legal dispute for other similar legal disputes. The trial court publishes the model case applications in the register of actions in the electronic Federal Gazette (www.bundesanzeiger.de).

III. European platform for online dispute resolution

Investors in the investment company who are also consumers can also turn to the EU’s online dispute resolution platform in the event of disputes in connection with purchase contracts or service contracts that have been concluded electronically: www.ec.europa.eu/consumers/odr

The following email can be used as the contact address for HEP Kapitalverwaltung AG: info@hep.global

The platform itself is not a dispute resolution body, but merely puts the parties in contact with a competent national dispute resolution body or establishes contact with the company.