1. Investment Suitability
Under investment suitability, Dolfio reviews criteria that may drive
investors away from intrinsically superior assets.
Liquidity and lock-in periods are often a barrier to entry in this market.
Finding open funds with decent performance fees is other ones. Finally,
a highly rated custodian, and systematic clauses such as bank warranties
on carbon assets should be required for investors to consider a fund.
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DOLFIO FUND RATING METHODOLOGY
Transparency and reliability of information are key to earn investors' trust, hence to the success of carbon markets. With investors' concerns in mind (rectangles below), we have built a methodology to screen carbon funds.To compare funds, we gather information from fund managers and other public sources, and leverage more than 100 fields in our database. Fund managers who do not provide reporting do not help foster a transparent, reliable marketplace and get penalized in our rating process.
2. Investment Process 
The investment process speaks to the professionalism of the investment
manager.
Some of the questions analyzed are: How open is the fund manager to explain his investment process? What project screening guidelines are implemented? What diversification guidelines by sector, technology, geography, stage of the project are observed? How is the fund manager dealing with project developers? How are those guidelines checked and enforced?
The investment process speaks to the professionalism of the investment
manager. Some of the questions analyzed are: How open is the fund manager to explain his investment process? What project screening guidelines are implemented? What diversification guidelines by sector, technology, geography, stage of the project are observed? How is the fund manager dealing with project developers? How are those guidelines checked and enforced?
3. Portfolio Analysis Zooming on the actual
portfolio gives investors a sense for what they buy. But assessing carbon
assets require a combined engineering and financial approach. Dolfio looks at the details of the portfolio breakdown and compares it with other funds for an assessment of the returns/asset value under current market conditions and under various scenarios.
4. Team and Risk Management
A strong risk management culture is critical to reduce potential losses
in volatile markets. How is risk tracked? What are the mitigation measures,
from financial management to contract clauses? What ratio are monitored,
and with which frequency?
Finally, Dolfio reviews the track record of the management team.
Finally, Dolfio reviews the track record of the management team.