Regulatory Disclosure

Our Pillar 3 Disclosure and Remuneration Code Disclosure are included with our annual accounts and statements filed with Companies House.

The Engagement Policy can be viewed here.

UK Stewardship Code Disclosure Statement

The UK Stewardship Code 2020 (the “Code”) sets high expectations of those investing money on behalf of UK savers and pensioners. In particular, the Code establishes a clear benchmark for 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 Code consists of 12 Principles for asset managers and asset owners, and six Principles for service providers. These are supported by reporting expectations which indicate the information that should be publicly reported in order to become a signatory.

CZ Capital supports the objectives of the Code. Its statement of how the principles of the Code have been applied and, where appropriate, an explanation of those principles which have not been complied with, is set out below:

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

CZ Capital recognises that it has a fiduciary duty to act in the best interests of its clients. Part of this responsibility involves ensuring that assets under our stewardship are managed in a way that creates long-term value for clients and their beneficiaries. CZ Capital is committed to maintaining an investment approach that incorporates environmental, social and corporate governance considerations, in a constructive manner, to safeguard the interests of our clients.

2. Signatories’ governance, resources and incentives support stewardship

CZ Capital is committed to incorporating best practice in all areas of our business. All partners and employees of CZ Capital are required to conduct their duties in a responsible manner and in accordance with CZ Capital’s values and policies. The interests of CZ Capital’s Partners are closely aligned to those of their clients. As a Collective Portfolio Management Investment firm, CZ Capital is subject to the AIFM Remuneration Code (SYSC 19B) for our AIFM business and SYSC 19C for our non-AIFM business. However, CZ Capital will apply the requirements of the AIFM Remuneration Code (SYSC 19B) to all staff.

3. Signatories manage conflicts of interest to put the best interests of clients and beneficiaries first

It is CZ Capital’s policy and duty to act in the best interest of all of its clients. Should a conflict of interest arise, CZ Capital’s senior management would take appropriate steps to ensure fair treatment of all clients, including disclosure of the conflict to the affected clients, if appropriate.

4. Signatories identify and respond to market-wide and systemic risks to promote a well-functioning financial system

CZ Capital has appropriate governance arrangements, systems and controls in place to minimise any threat to information security, including cyber-attacks as detailed in its Information and Cyber Security Policy. CZ Capital has conducted a risk assessment to identify the internal and external threats and vulnerabilities to its information assets and has assessed the potential impact and/or harm that would result if a threat were to occur. CZ Capital’s Information and Cyber Security Policy has been implemented to facilitate and enhance its ability to identify and track information and cyber security risks, assess the level of risk presented and determine how to manage each risk.

On at least an annual basis, and more frequently if deemed necessary by new cyber threat developments or the occurrence of any information or cyber security incident, CZ Capital evaluates the information and cyber security risks to which it is exposed and the controls that are in place.

5. Signatories review their policies, assure their processes and assess the effectiveness of their activities

CZ Capital reviews its policies at least annually and updates them as appropriate.  Appropriate risk management policies and procedures have been implemented and compliance monitoring is undertaken on a risk-based approach.

6. Signatories take account of client and beneficiary needs and communicate the activities and outcomes of their stewardship and investment to them

We provide regular reports to clients regarding our investment process and performance and we aim to be as transparent and co-operative as possible.

7. Signatories systematically integrate stewardship and investment, including material environmental, social and governance issues, and climate change, to fulfil their responsibilities

CZ Capital recognises that it has a fiduciary duty to act in the best interests of its clients. Part of this responsibility involves ensuring that assets under our stewardship are managed in a way that creates long-term value for clients and their beneficiaries. CZ Capital is committed to maintaining an investment approach that incorporates environmental, social and corporate governance considerations, in a constructive manner, to safeguard the interests of our clients.

8. Signatories monitor and hold to account managers and/or service providers

CZ Capital undertakes due diligence on its service providers to ensure that they continue to provide a good level of service and report on the outcome to the Partnership.   This due diligence includes visits to the fund administrators appointed by the Funds.

9. Signatories engage with issuers to maintain or enhance the value of assets

CZ Capital’s investment process emphasises the long-term intent of the investment decision and includes an on-going monitoring review and internal challenge of the investment thesis. Engagement with the senior management of the businesses is followed through where considered necessary to augment the initial investment and subsequent review process.

The main investment instruments used by CZ Capital are “Contracts for Difference” (“CFDs”) which do not confer the ability to vote at general meetings. Although CZ Capital is, therefore, unable to vote in respect of the majority of its investments it does have the ability to decide to sell a holding where this is considered the most appropriate response to any given situation.

As appropriate, CZ Capital monitors its investee companies to determine when dialogue with management may be necessary. The monitoring process may include the following:

  • Reviewing the governance arrangements of the companies, including the operation of the Board and any non-executive oversight.
  • Where appropriate, meeting members of the Board and/or the Chairman.
  • Retaining adequate records of company meetings.

The investment monitoring process aims to identify problems at an early stage and concerns will be raised with company management as appropriate. Due consideration is given to the Financial Reporting Council’s UK Corporate Governance Code when assessing the responses of investee companies to CZ Capital’s queries.

10. Signatories, where necessary, participate in collaborative engagement to influence issuers

There may be situations where it is appropriate to act collectively with other shareholders in order to engage with an investee company in the most effective manner. This would only be considered if a material issue arose and there were no perceived conflicts.

11. Signatories, where necessary, escalate stewardship activities to influence issuers

It is not CZ Capital’s intention to micro-manage the business of investee companies.  However, where there are concerns about any aspect of an investee company’s investment strategy, performance, governance or any other matter, this may be escalated to the management of the company.

12. Signatories actively exercise their rights and responsibilities

The main investment instruments used by CZ Capital are “Contracts for Difference” (“CFDs”) which do not confer the ability to vote at general meetings. However a small number of positions are held in cash equity form where CZ has the option to vote. CZ will generally vote proxy proposals, amendments, consents or resolutions relating to client securities, including interests in private investment funds, if any, on a case-by-case basis and in accordance with the following guidelines:

  1. Support a current management initiative if CZ’s view of the issuer’s management is favourable;
  2. Vote to change the management structure of an issuer if it would increase shareholder value;
  3. Vote against management if there is a clear conflict between the issuer’s management and shareholder interest;
  4. In some cases, though CZ supports an issuer’s management, there may be corporate governance issues that CZ believes should be subject to shareholder approval; and/or
  5. May abstain from voting proxies when it is determined that the cost of voting the proxy exceeds the expected benefit to its clients.

The portfolio managers receive all proxies and will determine how to vote.  The elections will be applied consistently for all eligible positions across the accounts managed by CZ. 

 

Please click here for the latest disclosure of votes cast.

No consideration of sustainability adverse impacts

CZ Capital LLP does not currently consider the adverse impacts of investment decisions on sustainability factors in respect of the funds it manages.

CZ Capital LLP recognises that it has a fiduciary duty to act in the best interests of its clients. Part of this responsibility involves ensuring that it manages the assets under its stewardship in an appropriate way with an aim to create long-term value for clients. CZ Capital LLP is committed to maintaining an investment approach that incorporates Environmental, Social and Corporate Governance considerations (“ESG”), in a constructive manner, to safeguard the interests of our clients.

The financial instruments CZ Capital LLP invests in on behalf of our clients are primarily derivatives of UK listed securities. Given the size and nature of these financial instruments along with our diversified market neutral strategy, we believe the adverse sustainability impact of our investment decisions can be considered low. As CZ Capital LLP does not currently consider sustainability adverse impacts, its remuneration policy does not currently take these impacts into account.

CZ Capital LLP is committed to incorporating best practice in all areas of its business. Our ESG Policy reflects our current approach to corporate social responsibility and sustainable investing. CZ Capital LLP recognises that best practices and governance models relating to sustainable investing may change and develop over time and therefore maintains a dynamic approach. Further details of our ESG Policy can be requested via email to investor@czcapital.co.uk.