Modern Slavery Act Statement

Introduction

The UK Modern Slavery Act of 2015 (''MSA") requires large organizations doing business in the United Kingdom to publish a disclosure statement (this “Statement”) detailing the steps taken to monitor and address the risks of "slavery and human trafficking" in its business and supply chains. As referenced in this Statement, the term "modern slavery" includes slavery, servitude and forced or compulsory labor and human trafficking, all of which are abuses of a person's freedoms and rights.

This statement is published on behalf of CarVal Investors GB LLP, regulated by the Financial Conduct Authority, and its corporate member, CarVal Investors UK Ltd (collectively “CarVal UK”).  AB CarVal Investors L.P. (“AB CarVal”) as US parent to CarVal UK is committed to ensuring, to the best of its ability, that modern slavery does not take place in its global business or supply chains.  The same policies, procedures, due diligence, and training are applied across all AB CarVal subsidiaries.

Our Structure and Business

AB CarVal is an established global alternative investment fund manager focused on distressed and credit-intensive assets and market inefficiencies.  As of December 31, 2022, it had approximately $16 billion in assets under management. AB CarVal invests globally with distinct teams covering North America, Europe and the Emerging Markets.

As a professional investment firm with five global locations, AB CarVal’s supply chain is relatively simple and the nature of the services provided limits the opportunity for modern slavery to exist within AB CarVal’s supply chain or its business.  The vendors most commonly used include professional and legal service firms, research providers, and technology service providers.  Because of the nature of these services, we believe the risk of modern slavery within AB CarVal’s supply chain is low.

Our Policies and Practices

Our documented policies and procedures, including the Code of Business Conduct and Ethics and the Employee Handbook, ensure that our business is continually focused on ethical business practices including complying with local labor laws within the countries in which we operate.

AB CarVal implemented a Responsible Investing Policy in mid-2017 that draws on the United Nations Principles for Responsible Investing, to which AB CarVal is a signatory. It is AB CarVal's policy to incorporate material environmental, social and governance ("ESG")-related matters as part of its investment review and underwriting processes. Our Responsible Investing Policy is broad and encompasses working conditions and labor laws. Our investment diligence process is designed to identify issues – including legal or ethical issues – that may affect the risk or return of the investment. We would consider problematic practices with respect to Modern Slavery laws to fall into this category.

The United Nations Principles for Responsible Investment form the basis of AB CarVal's commitment to Responsible Investing, and AB CarVal is committed to adhering to the principles in a manner that is consistent with its broader fiduciary responsibilities. Pursuant to the Responsible Investing Policy, AB CarVal's investment teams and the Portfolio Investment Committee will incorporate into all investment analysis and decision-making those ESG principles and considerations they determine to be relevant, in order to better manage risk and generate sustainable, long-term returns.

Due Diligence, Risk Assessment, and Mitigation

AB CarVal believes that environmental, social and governance factors, including Modern Slavery, have the potential to influence investment outcomes, and consequently we are committed to incorporating them into investment decision making whenever appropriate.

ESG factors are considered as part of bottom-up, fundamental research on specific situations, and form a part of our sectoral macro research. The SASB Materiality Map is one of the key tools made available to investment professionals to incorporate as appropriate into our investment process. SASB’s Materiality Map identifies sustainability issues that are likely to affect the financial condition or operating performance of companies within an industry. SASB identifies 26 sustainability-related business issues, or General Issue Categories, which encompass a range of Disclosure Topics and their associated Accounting Metrics that vary by industry. As it relates to Modern Slavery, Human Rights & Community Relations, Labor practices, and Employee Health & Safety are among the issue categories presented in the Materiality Map. All investment professionals are required to certify that they are familiar with and understand their responsibilities under the Responsible Investment Policy.

AB CarVal also has an extensive vendor due diligence process that takes into account the nature of the services, the governance and control framework, information security, and other factors that may be relevant to the relationship.  A risk assessment is performed on each vendor and ongoing monitoring is conducted based on the risk posed to the firm.  While modern slavery is not a specific focus of the vendor due diligence process, AB CarVal believes that the risk of modern slavery is satisfactorily mitigated based on the nature of the services.

Training

AB CarVal conducts annual compliance training for all employees, and training is also provided to each new employee who joins the organization. This training covers key elements of the firm’s compliance policies and procedures, including its whistleblowing policy.

AB CarVal has implemented firmwide ESG training and will continue to provide training to employees on at least an annual basis. The training is designed to highlight the potential ESG issues and obligations to incorporate them into investment analysis as appropriate where they may materially affect investment outcomes.

Statement of Approval

This statement has been approved by the members of CarVal Investors GB LLP, the directors of CarVal Investors UK Ltd as of 30 June, 2023 and signed by an authorized representative of CarVal Investors UK Ltd.