ESG Model
Stakeholders
Through a materiality study we have identified the stakeholders with whom, due to the nature of our activities, we relate to at Fondo de Fondos. In this regard, we seek to understand the needs, expectations, and concerns of the groups, and with this information develop specific strategies for each of them.
The Stakeholders identified are as follows:
Materiality
At Fondo de Fondos, we recognize the importance of identifying and prioritizing key Environmental, Social Responsibility and Corporate Governance (ESG) topics as a fundamental part of our strategy. Our focus is on generating a relevant impact, both inside and outside of our organization.
During 2023, we conducted our materiality study in order to focus our efforts and resources on managing the most relevant topics. This approach will allow us to make evidence-based strategic decisions, ensuring that our actions and practices are aligned with the needs and expectations of our stakeholders. In addition, it will allow us to effectively manage current challenges and opportunities in the ESG context.
In this regard, we have identified 51 relevant topics in the areas of Environment, Social Responsibility and Governance. Among them, we have highlighted 21 strategic material topics that deserve special attention, as presented in the following matrix:
In line with our commitment to ensure that the Sustainability Strategy focuses on the most relevant areas for our stakeholders and Fondo de Fondos, the 21 strategic topics to be prioritized have been summarized and 8 material topics have been identified for special emphasis.
Our Risk Management
Within the operation of Fondo de Fondos, we have identified the main risks, which include:
Operational risk
The potential loss due to failures or deficiencies in internal controls, errors in the processing and storage of transactions or in the transmission of information, as well as adverse administrative and judicial resolutions, fraud or theft, and includes, among others, technological risk and legal risk.
Counterparty risk
Counterparty risk originates in the investment process, which is the principal activity of Fondo de Fondos. It is defined as the inherent risk of financial loss to which the institution is exposed when it commits and delivers monetary resources to various Private Equity/Entrepreneurial Fund managers. The mitigation of this risk is achieved through selection, verification (Due Diligence) and decision-making processes by the Investment Committee and the Board of Directors.
Portfolio diversification risk
An investment in Fondo de Fondos is a strategy that may have a significant impact on the improvement of the risk profile of an investment portfolio. This option offers a comprehensive diversification by pooling different investment funds into a single vehicle. By spreading resources across a variety of underlying assets, geographic regions and asset classes, the exposure to specific risks is reduced and market fluctuations are smoothed out. This comprehensive diversification is essential to optimize the balance between portfolio risk and return, because it minimizes the probability of significant losses and provides investors with greater comfort in times of market volatility.
Business Model
Our strategy has resulted in a highly diversified portfolio that encompasses multiple sectors, including Private Equity, Entrepreneurial Capital, Energy and Impact Capital. The investment thesis of the Funds focuses on key areas such as services, consumer products, information technologies, software, IT services, financial and credit services, agriculture, food production, and energy, among others.
Furthermore, we manage alternative assets, in accordance with international best practices. This has allowed us to generate value for our investors and establish strategic alliances with the objective of boosting the risk capital ecosystem in Mexico.
Affiliations
On December 2020, Administradora CMIC, S.A. de C.V. joined the United Nations Global Compact, assuming the commitment to annually present its Communication of Progress (CoP). The purpose of this initiative is to report the progress achieved during the specified period in the four fundamental pillars of the Compact:
Human rights - Labor -
Environment - Anti-corruption
Fondo de Fondos emphasizes its commitment to sustainable and responsible investment by joining the United Nations Principles for Responsible Investment (UNPRI) on July 3rd , 2019. This action reflects its determination to adhere to best practices in this field, prioritizing not only financial performance but also the social and environmental impacts of its investments. Its adherence to UNPRI illustrates its comprehensive investment approach, aiming for economic benefits while contributing to the well-being of society and the environment.