Stewardship Policy

This policy statement sets out the how Tatton Investment Management Limited (TIML) adopts controls and procedures to ensure compliance with Article 3g of the Shareholder Rights Directive II and adherence to the EFAMA Stewardship Code.

Background

Asset managers must act within strict statutory and regulatory requirements when managing the assets entrusted to them by clients. In certain investment strategies, asset managers may seek to preserve and/or enhance the value of the companies they invest in, through exercising voting rights and engagement with the management of the issuers. Where appropriate, asset managers should consider stewardship/engagement for all equity investment strategies.

Stewardship aims to promote the long-term success of companies in such a way that companies, investors and the economy benefits.

These requirements apply only to the extent that firms invest in shares traded on a regulated market.

The Tatton Investment Management Limited (TIML) Service

Established in 2013, TIML is ranked among the fastest-growing platform-only investment managers in the UK, with over £7 billion in assets under management as at 30th September 2019.

We provide Financial Advisers with investment services that help their clients meet their objectives. Our core offering is a range of risk-profiled discretionary investment portfolios designed to suit most investment styles. Our service is available through retail investment platforms, built around our philosophy of making high-quality investment management accessible and affordable.

In addition to our model portfolio service we also offer an Alternative Investment Market (AIM) portfolio service, which directly invests in shares. All our investments are managed on a discretionary basis.

How TIML engages with the companies in which our clients have investments

At the core of the AIM team’s investment strategy is the direct and continues engagement and contact with the management of the companies that we invest in.

How TIML monitors the companies in which our clients have investments

TIML believes an essential component of stewardship is effective monitoring of the companies we invest in. Our monitoring includes research carried out by the AIM team and includes:

Management meetings

The AIM team actively engages with and questions the company’s management to determine whether the leadership continues to be effective and adheres to the spirit of the UK Corporate Governance Code. This is especially important if there have been significant changes in the senior team or where potential conflicts may arise when management have a material shareholding and/or influence on the company and the future strategy of the company.

Reviewing and analysing financial company reports, accounts and regulatory communications. In conjunction with meeting the management reviewing company records and communications helps us to assess the company’s financial status and performance. We also assess whether the management is following consistent strategies and policies and whether these fit our investment criteria. Active monitoring of non-financial performance and risk assessment will take place while assessing the appropriate capital structure of the business. We will also assess the company and compare it with others in the same sector.

How TIML manages actual and potential conflicts of interests

In order to act in the best interest of our clients and due to the active nature of TIML’s engagement with companies’ management and advisors we are frequently approached in connection with corporate activity and Market Sounding events. A Market Sounding exercise will require us to be privy to non-public information that may be deemed to be "Inside Information” (i.e. material non- public information that is highly confidential and price sensitive).

As a result of being an Insider:
  • we will be prohibited from using the information, or attempting to use the information, by acquiring or disposing (directly or indirectly), the company's securities or other financial instruments relating to this information either on our own account or on behalf of someone else;
  • we will be prohibited from using the information, or attempting to use the information, by cancelling or amending an order which has already been placed concerning the company's securities or other financial instruments to which the information relates; and
  • we will be obliged to keep the information received during the entire Market Sounding process (including during follow-up calls/meetings) strictly confidential and may not disclose the information to anyone other than your legal/compliance personnel or others involved in evaluation or execution of this transaction as the information is being given to you on a need to know basis.
The AIM team maintains an Insider Events register that is available to senior management and the Compliance department. In addition, the AIM team will be consulted in the event of any personal account trading requests from staff members in AIM companies to avoid any potential conflict of interests.

How TIML exercises voting rights and other rights attached to shares

In relation to Corporate actions we follow the platform general policy in respect of any bonus and scrip issues as follows:
  • All bonuses will be automatically credited to the clients wrap.
  • In the case of a scrip dividend the default option is to elect to take any cash alternative and the platform will not be responsible for informing TIML that any scrip alternative exists.
 In other circumstances, the platform will use reasonable endeavours to inform TIML of any Corporate actions relevant to the Asset as soon as reasonably possible after it becomes aware of the Corporate action and follow the options communicated to them by TIML.

The platform will not normally exercise any voting rights attaching to any of the Assets held in the wrap nor attend any shareholder meetings in respect of the Assets held. There may be occasions, such as actions to be undertaken on a distressed Asset, where the platform will communicate via a proxy vote and following collation of responses, vote accordingly.

TIML’s approach to stock lending

TIML does not engage in stock lending

Engagement with other investors

We are willing to engage with other investors and listen to their views especially if our views are aligned and where we believe a particular action will be in our client’s interests.

Accounting to clients

The clients selected retail investment platform is responsible for sending clients their investment reports in accordance with regulatory requirements. We do not send clients reports on how TIML has discharged its stewardship duties because they mainly comprise ‘behind the scenes’ activities often on a confidential basis.