Shareholders Rights Directive II (‘SRD II’) Disclosure
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Introduction
The Firm is a Full-Scope Alternative Investment Fund Manager.
SRD II
Article 3g of SRD II, which is summarized in the FCA Handbook under COBS 2.2B, requires a firm such as the Firm to either:
- develop and disclose an engagement policy describing how the firm integrates shareholder engagement in its investment strategy; or
- disclose why the firm has chosen not to comply with those requirements.
Such an engagement policy requires a firm to describe how it:
- integrates shareholder engagement in its investment strategy:
- monitors investee companies on relevant matters, including:
- strategy
- financial and non-financial performance and risk
- capital structure
- social and environmental impact and corporate governance
- conducts dialogues with investee companies.
- exercises voting rights and other rights attached to shares.
- cooperates with other shareholders.
- communicates with relevant stakeholders of the investee companies; and
- manages actual and potential conflicts of interests in relation to the firm’s engagement.
The above engagement policy is limited to the extent that a firm invests on behalf of investors in shares traded on a regulated market (or on third country markets that meet comparable requirements and where the shares dealt in are of a quality comparable to those in a regulated market in the UK).
The Firm’s approach to engagement
The Firm’s investment strategy is such that
❖ The Firm has decided that, whilst it supports the aims of SRD II, it has chosen not to comply with it at the present time because the investment strategy pursued by the funds, to which the Firm provides investment services to, trade equity positions, which is a small portion of the investments and the remaining activity is via derivatives / swaps, which do not come with any voting rights attached. For the small portion of listed equities that the Firm holds the exposure is not typically on an activist investor basis. Therefore, an Engagement Policy has limited applicability to the Firm’s investment strategy given its limited opportunity to exercise stewardship. Were stewardship issues were to arise the Firm would take a consistent approach to engagement with issuers and their management in all jurisdictions in which it invests and in that regard the Firm has a proxy voting policy.
While the Firm generally supports the objectives that underlie SRD II, for the above reason the Firm has chosen not to produce an engagement policy at this time.
