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This website is intended for professional investors only. Past performance is not a guide to future performance.

The market value of, and the income derived from, the shares of any Sanlam FOUR fund may fluctuate in accordance with: the values of the investments held by the Funds and other market conditions. Investors may not get back the full value of their investment. There can be no guarantee that the investment objectives of the Funds will be met. The Funds may from time-to-time be more concentrated than those of other investment funds and thus potentially carries a higher level of risk than a more diversified portfolio. There will be times when the Funds' investment performance will be quite unlike that of any stock market index, which may or may not be to the advantage of the Funds. This website does not constitute an offer, invitation or solicitation. The information and opinions contained in this website are subject to change without notice.

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This website has been prepared by Sanlam FOUR Investments UK Limited (“Sanlam FOUR”), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority.

This website and the information contained in it is confidential and is being supplied to potential investors solely for information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose.

This website does not constitute or form any part of any offer or invitation to issue or other solicitation of any offer to subscribe for or recommendation to issue, acquire, sell or arrange any transaction in any securities. No reliance may be placed for any purpose whatsoever on the information, representations or opinions contained in this website nor shall it or any part of it form the basis of or act as an inducement to enter into any contract for any securities, and no liability is accepted for any such information, representations or opinions.

The information contained in this website is in summary form and is being provided for background purposes only, has not been verified and is subject to material amendment, revision and up-dating.

The statements contained in, or incorporated by reference into, this website that are not historical facts are “forward-looking statements”, which can be identified by the use of forward-looking terminology such as “believes”, “expects”, “intends”, “may”, “will”, “should” or “anticipates” or the negative thereof or other variations thereof or comparable terminology, that involves risks and uncertainties. Such risks and uncertainties include, but are not limited to, changes in market, political or business conditions or in the tax or regulatory framework in the UK or other relevant jurisdictions, any of which could cause actual results to vary materially from the future results implied in such forward-looking statements. No assurance can be given as to the future results that will be achieved. The past performance of funds managed by Sanlam FOUR is not a guide to the future performance of funds managed by Sanlam FOUR.

Neither Sanlam FOUR nor any other person makes any guarantee, representation or warranty, express or implied as to the accuracy, completeness or fairness of the information and opinions contained in this website which has been prepared in good faith, nor does either Sanlam FOUR nor any other person accept any responsibility or liability whatsoever for any loss howsoever arising, either directly or indirectly from any use of this website or its contents or otherwise arising in connection therewith. The information contained in this website may not be reproduced without the prior written consent of Sanlam FOUR.

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Pillar 3 Risk Disclosure Statement

Sanlam FOUR Investments UK Limited (“the firm”) is required to disclose information relating to the capital it holds and each material category of risk it faces in order to assist users of its accounts and to encourage market discipline.

These disclosures aim to provide information on the risk exposures faced by the firm and the risk assessment process it has in place to monitor these. These disclosures are seen as complimentary to the firm’s minimum capital requirement calculation (Pillar 1) and the internal review of its capital adequacy (Pillar 2).

The Pillar 3 disclosure document has been prepared by the firm in accordance with the requirements of BIPRU 11 and is verified by the Board. All figures, unless otherwise stated, are as at 31st December 2014.

Pillar 3 disclosures will be issued on an annual basis after the year end and published as soon as practical when the audited annual accounts are finalised.

We have made no omissions on the grounds that it is immaterial, proprietary or confidential.

Capital Resources

The firm maintains capital resources as follows:

31st Dec 2014
£000
Tier 1 capital* 1,624
Tier 2 capital 0
Tier 3 capital 0
Deductions from Tiers 1 and 2 Liquid Assets 45
Total capital resources 1,579
* No innovative tier one capital is held

The capital resources detailed above are considered adequate to continue to finance the firm. The firm continues to invest capital to grow the business further and will consider further capital injections as and when necessary.

Risk Management

The firm has established a risk management process in order to ensure that it has effective systems and controls in place to identify, monitor and manage risks arising in the business. The risk management process is monitored by the Finance Manager and the Head of Operations, with the Management Committee taking overall responsibility for this process and the fundamental risk appetite of the firm.

A formal update on operational matters is provided to the Management Committee on a monthly basis. Monthly management accounts demonstrate continued adequacy of the firm’s regulatory capital is reviewed on a regular basis.

Credit risk

The main credit risk to which the firm is exposed is in respect of its debtors. However, there has not been a history of bad debts and as such the counterparty risk it is required to hold in respect of management fees due is considered to be more than adequate to cover such eventuality.

The credit control process is operated by the firm’s Finance Manager and any significant outstanding balances would be reported to senior management via the management accounts.

The Finance Manager reviews bank reconciliations on a monthly basis in order to ensure the firm’s records are in agreement with those of the bank. Given the nature of the firm’s exposures, no specific policy for hedging and mitigating credit risk are in place.

The firm has a limited number of credit exposures relating to its investment management clients to which a risk weighted exposure of 8% of the total balance due is applied under the simplified standardised approach detailed in BIPRU 3.5.5 of the FCA Handbook. All bank accounts are held with UK credit institutions and as such are subject to a risk weighted exposure of 1.6% in accordance with BIPRU 3.4 of the FCA Handbook.

Market risk

The firm holds no trading book positions, therefore it is not exposed to market risk. However, the firm does maintain a US dollar bank account to facilitate US dollar revenue due, thereby exposing the firm to limited foreign exchange rate risk. A risk weighted exposure of 8% is applied to all foreign currency cash balances on accordance with BIPRU 7.5 of the FCA Handbook.

Business risk

The firm conducts a formal assessment of the business risk to which it is exposed on an annual basis, though given the size and nature of the firm no separate risk management function is considered necessary in respect of the firm’s own balance sheet. Matters arising from the review are considered and mitigating or remedial action is taken where appropriate.

The firm’s revenue is reliant on the performance of the existing funds under management and its ability to launch new funds/obtain new mandates. As such, the risk posed to the firm relates to underperformance resulting in a decline in revenue, adverse market conditions hindering the launch of new funds and ultimately the risk of redemptions from the funds managed by the firm. This risk is mitigated by significant levels of capital held by the firm which will continue to cover all the expenses of the business going forward (given no significant change to revenues or expenses).

Operational risk

The firm conducts a formal assessment of the operational risk to which it is exposed on an annual basis. Whilst no separate risk management function is considered necessary in respect of the operational risks which the firm faces given its size and the nature of the risks faced, risk management remains a key function of the firm’s business in respect of the portfolios it manages. Matters arising from the review are considered and mitigating or remedial action is taken where appropriate.

The Firm has professional indemnity insurance in place to mitigate against the risk of costs being incurred due to trade errors occurring. The insurance cover up to £1.5m is provided by PartnerRe Ireland Insurance Ltd and Lloyds Consortium 9862 (both A+ rated by S&P). The firm is then covered by the Sanlam Group policy up to SAR 1,000,000,000 (approximately £50m).

The firm is reliant on its ability to attract and retain key investment management personnel. Appropriate polices are in place to mitigate this, including thorough vetting procedures and an appropriate remuneration structure.

The firm has alternative arrangements in place should a disaster recovery event occur. These arrangements are tested on a regular basis in order to ensure that they would be effective should they be required to be invoked.

Fixed Overhead Requirement

The firm’s Pillar 1 capital requirement is determined by its Fixed Overhead Requirement (FOR), calculated in accordance with GENPRU 2.1.53, since this is typically the largest of the variable factors to consider. The firm monitors its expenditure on a monthly basis and takes into account any material fluctuations in order to determine whether the FOR remains appropriate to the size and nature of the business or whether any adjustment needs to be made intra-year. This is monitored by the Finance Manager and reported to the Management Committee on a monthly basis.

The firm calculates it’s FOR after first deducting variable costs from its annual expenditure. Variable costs deducted when calculating the firm’s current FOR relate to discretionary bonuses paid to staff.

Stewardship Code

The Firm is an investment manager based in the United Kingdom and authorised and regulated by the Financial Services Authority. We endeavour to apply our approach on stewardship to all companies that we invest in on behalf of our clients. Our approach is consistent with the Firm’s overall aims, which are to provide good long-term performance to our clients, and keeping clients’ interests paramount.

The Firm monitors all investee companies as part of its general investment policy and approach. The Firm takes action in line with its investment objectives where its research of publically available information warrants such action. Given the nature of our chosen investment strategy, this approach does not include active engagement with UK listed investee companies, nor do we consider that our clients would expect such engagement.

Where we have a right to vote in relation to investee companies, we will take decisions in the best interest of our investors and their long term interests and record what decisions we have taken in this respect. We do not normally make those decisions public. If our investment strategy changes in such a manner that the provisions of the Code become relevant, the Firm will amend this disclosure accordingly. We have a Proxy Voting Policy to control these activities.

Remuneration Code Disclosure

The Remuneration Code (“the RemCode”) covers an individual’s total remuneration, fixed and variable. The Firm incentivizes staff through a combination of the two.

The Firm’s business is to provide Investment Management services to its clients.

Our policy is designed to ensure that we comply with the RemCode and our compensation arrangements:

  1. are consistent with and promotes sound and effective risk management;
  2. do not encourage excessive risk taking;
  3. include measures to avoid conflicts of interest;
  4. are in line with the Firm’s business strategy, objectives, values and long term interests

Proportionality

The Firm falls within the FCA’s fourth proportionality tier and such this disclosure is made in line with the requirements for a Tier 4 Firm.

Application of the requirements

We are required to disclose certain information on at least an annual basis regarding our Remuneration policy and practices for those staff whose professional activities have a material impact on the risk profile of the firm.

  1. Summary of information on the decision-making process used for determining the firm’s remuneration policy
    • The firm’s policy has been agreed by the Board
    • The Firm has appointed an independent Human Resource committee for the purpose of remuneration approval
    • The firm’s policy will be reviewed on an annual basis, or following a significant change to the firm’s ICAAP.
    • The firm’s ability to pay variable remuneration is based on the firm’s audited profits; unless otherwise agreed by the board
  2. Summary of how the firm links between pay and performance
    • Individuals are rewarded based on their contribution to the overall strategy of the business:
      • Investment Generation
      • Investment Trading
      • Sales & Marketing
      • Operations
    • Other factors such as performance, reliability, effectiveness of controls, business development and contribution to business are taken into account when assessing the performance of the senior staff responsible for the infrastructure of the firm.
  3. Aggregate quantitative information on remuneration broken down by significant business division:
    Business Area Aggregate compensation expense for prior fiscal year *
    Investment Management £ 1,838,005
    Operations/Sales & Marketing £ 930,993
  4. Aggregate quantitative information, for staff whose actions have a material impact on the risk profile of the firm:
    Code Staff Aggregate compensation expense for prior fiscal year *
    Senior Management £ 801,292

    5. We may omit required disclosures on the grounds of data protection, however, the firm has made no such omissions for the purpose of this disclosure.

    * The Firm’s fiscal year covered a 15 month period from 1st October 2013 to 31st December 2014.

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