UK Stewardship Code / Shareholder Rights Directive II
Disclosure Statement - Update 2021
Under Rule 2.2.A.5 of the FCA's Conduct of Business Sourcebook, Tresidor Investment Management LLP (“Tresidor” or the “Firm”) is required to include on this website a disclosure about the nature of its commitment to the UK Financial Reporting Council's Stewardship Code 2020 (the " 2020 Code") or, where it does not commit to the 2020 Code, its alternative investment strategy.
In addition, under the Shareholder Rights Directive II (SRD II), Tresidor is required to publicise details of its equity investment strategy and how this is aligned with the profile and duration of the Firm’s liabilities and how it contributes to the medium to long-term performance of the Firm’s assets. Both of these are described below.
(A) The UK Stewardship Code 2020
The 2020 Code is a voluntary code and sets out a number of principles relating to engagement by investors with UK equity issuers. Investors that commit to the Code can either comply with it in full or choose not to comply with aspects of the Code, in which case they are required to explain their non-compliance and state in general terms their alternative investment strategy.
The FRC defines ‘stewardship’ as ‘the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.’
The 2020 Code principles for asset managers and asset owners are:
1) Signatories’ purpose, investment beliefs, strategy, and culture enable stewardship that creates long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society.
2) Signatories’ governance, resources and incentives support stewardship.
3) Signatories manage conflicts of interest to put the best interests of clients and beneficiaries first
4) Signatories identify and respond to market-wide and systemic risks to promote a well-functioning financial system.
5) Signatories review their policies, assure their processes and assess the effectiveness of their activities.
6) Signatories take account of client and beneficiary needs and communicate the activities and outcomes of their stewardship and investment to them.
7) Signatories systematically integrate stewardship and investment, including material environmental, social and governance issues, and climate change, to fulfil their responsibilities.
8) Signatories monitor and hold to account managers and/or service providers.
9) Signatories engage with issuers to maintain or enhance the value of assets.
10) Signatories, where necessary, participate in collaborative engagement to influence issuers.
11) Signatories, where necessary, escalate stewardship activities to influence issuers.
12) Signatories actively exercise their rights and responsibilities.
The Firm may provide investment management services to a number of Alternative Investment Funds (AIFs). Whilst the Firm’s investment strategy focuses on European credit this could involve the Firm trading in single, publicly traded, UK equities. When the Firm does invest directly in UK single equities these would typically represent only a small part of the Firm’s business. Hence, while the Firm generally supports the objectives that underlie the 2020 Code and seeks to adhere to the highest standards of corporate governance and due diligence in respect of its investments, the Firm believes that the Principles are not applicable to its investment activities at this time. The approach of the Firm in relation to engagement with issuers and their management is determined globally. The Firm takes a consistent approach to engagement with issuers and their management in all of the jurisdictions in which it invests and, consequently, does not consider it appropriate to commit to any particular voluntary code of practice relating to any individual jurisdiction.
(B) The Shareholder Rights Directive II
The Shareholder Rights Directive II (SRD II) is a European Union (EU) directive, and aims to encourage effective stewardship and long term decision making, involving transparency on engagement policies and investment strategies between traded companies and investors. SRD II applies to asset managers including full-scope Alternative Investment Fund Managers that invest in shares traded on a regulated market in the EEA as well as “comparable” markets situated outside of the EEA. Firms in scope must on a “comply or explain” basis develop and publicly disclose an engagement policy, and annually disclose how the engagement policy has been implemented including a general description of voting behaviour.
The engagement policy must describe how a firm:
integrates shareholder engagement in its investment strategy:
monitors investee companies on relevant matters, including:
strategy;
financial and non-financial performance and risk;
capital structure; and
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.
As Tresidor is primarily a credit manager, the Firm does not have a pre-determined equity investment strategy, and hence the majority of the SRD II is not relevant to Tresidor’s activities and as such an engagement policy is not appropriate to the investment strategies currently pursued.
For further information on the Firm’s approach with respect to either the UK Stewardship Code or the SRD II, please contact:
Marc Sharman, Chief Operating Officer