What is the value of investment and why is it needed?
The value of investment per quarter is needed to finalize the last step of the SFDR Principal Adverse Impact (PAI) indicators’ aggregation for each fund. SFDR methodology asks to calculate PAIs in such a way as to account for the investment values held in the companies during the financial year. Given that the investment held in the portfolio can change during the year, SFDR asks for investment values for each quarter for portfolio companies.
ℹ️ Below is the definition of "value of investment" as provided by official SFDR guidance:
“PAI results should be calculated using the current value of the investment derived from the valuation of individual investment (e.g. share) price valued at fiscal year-end multiplied by the quantity of investments (e.g. shares) held at the end of each quarter. In such a manner, the composition of the investments at the end of each quarter is taken into account, but the valuation reflects the fiscal-year end point in time.”
💡 For VCs, the value of investment per quarter for each portfolio company is usually equal to the enterprise value weighted by the fund's ownership in that company.
How to insert the value of investments per quarter
To add the value of investments data, go to Tasks > select the relevant fund with the "Group" filter > search Current value of investment > click and add the quarterly value for each portfolio company.
1) Go to Tasks > select the relevant fund with the “Group“ filter > search “Current value of investment”
2) Click on “Current value of investment” > Read carefully the instructions and add the current value of investment per quarter for each portfolio company
Once all values have been entered, click on “Submit”. The PAI calculations will run automatically and the final PAI results will be calculated in real time. Done! ✅