The Shareholder Rights Directive II (“SRD II”), as onshored in the UK via the European Union (Withdrawal) Act 2018, contains various obligations relating to shareholder engagement and transparency. The SRD II seeks to encourage effective stewardship by improving transparency in how stewardship is exercised. These obligations were implemented in the UK on the 10 June 2019, and those which apply to asset managers are contained in the Financial Conduct Authority’s Conduct of Business Sourcebook. The obligations affect alternative investment fund managers, such as SV Health Managers LLP (“SV”). Broadly, the SRD II applies to the extent a firm is investing (or has invested) on behalf of investors in shares traded on a regulated market.
SV is required to develop and publicly disclose an engagement policy which complies with the requirements set out in the FCA’s Conduct of Business Sourcebook and publicly disclose on an annual basis how that engagement policy has been implemented in a way that meets the requirements (including disclosure of certain of voting activities in respect of shares in investee companies) or to publish a clear and reasoned explanation of why we have chosen not to comply any such requirements. The engagement policy must describe how the SV:
- integrates shareholder engagement in its investment strategies;
- monitors investee companies on relevant matters (e.g. strategy, financial and non-financial performance and risk, capital structure, social and environmental impact, and corporate governance);
- conducts dialogues with investee companies;
- exercises voting and any other shareholder rights;
- cooperates with other shareholders;
- communicates with relevant stakeholders of investee companies;
- manages actual and potential conflicts of interests in relation to the Firm’s engagement.
The Firm does not invest in listed equities as a core strategy. It may invest in listed equities from time-to-time.
While we support the objectives of SRD II, our investment strategies do not significantly involve investing in equity holdings in listed companies, and such listed equities form only a small component of our overall assets under management.
In cases where we do have exposure to publicly listed equities, and consequently the voting rights associated with them, we will exercise such voting rights as per our proxy voting policy. Accordingly, we do not consider it appropriate to adopt a shareholder engagement policy as described by SRD II at this time. If our investment strategies change so that the provisions of SRD II become relevant, we will update this disclosure accordingly.
This Statement is reviewed annually and updated where necessary to reflect changes in circumstances and actual practice. Should the Firm’s position change we will review our commitment to SRD II and make appropriate disclosure at that time. SV will always seek to work with management of portfolio companies to grow and improve those entities for long term sustainability and for the benefit of multiple stakeholders.
Furthermore, SV recognises the importance of environmental, social and governance issues in protecting and creating value for our investors, portfolio companies and other actors in the areas in which we operate. SV always seeks to act as responsible stewards of investors’ capital and portfolio companies’ businesses.
