Shareholder Rights Directive II
Makuria makes Pillar 3 disclosures annually. The information contained in this disclosure is accurate as at 31 March 2019. It has not been audited by Makuria’s external auditors and does not constitute any form of financial statement.
Certain information relating to BIPRU 11.5 may be omitted on the basis that it is deemed to be immaterial or proprietary/confidential. The Firm regards information as material in the disclosure if its omission or misstatement could change or influence the assessment or decision of a user relying on that information for the purpose of making economic decisions. The Firm regards information as proprietary/ confidential if sharing that information with the public would undermine its competitive position. Proprietary/confidential information may include information on products or systems which, if shared with competitors, would render the Firm’s investments therein less valuable. Further, the Firm must regard information as confidential if there are obligations to customers or other counterparty relationships binding the Firm to confidentiality.
The framework consists of three pillars:
As a CPMI firm for the Pillar 1 regulatory capital calculation of credit risk, Makuria has adopted the standardised approach
Background to the Firm/Introduction
The Firm is authorised and regulated by the FCA and as such is subject to minimum regulatory capital requirements. The Firm is categorised by the FCA, for capital purposes, as a Collective Portfolio Management Investment (“CPMI”) firm. It is an investment management firm and has no trading book exposures. The Firm is not required to prepare consolidated reporting for prudential purposes.
Pillar 1 - Minimum Capital Requirements
As a CPMI firm, Makuria has an initial capital requirement of €125k and an ongoing capital resource requirement, which comprises the greater of:
Whichever is the applicable of:
The Firm has deemed the FOR to be the higher of these values and this is therefore used for the purposes of the Pillar 1 calculation.
Pillar 2 – ICAAP
Risk Management Objectives and Policies
Due to the nature, size and complexity of the Firm, does not have an independent risk management function. Senior management are responsible for the management of risk within the Firm and their individual responsibilities are clearly defined. Senior management report to the Firm’s governing body, on a frequent basis regarding the risks. Makuria has clearly documented policies and procedures, which are designed to minimise risks to the Firm and all staff are required to confirm that they have read and understood them.
The ICAAP is the process through which Makuria determines that it is able to identify and manage its key risks on an ongoing basis and ensure that it has sufficient capital in respect of such risks. The process is forward looking and is an integral part of the management of the Firm. The Chief Operating Officer (“COO”) (who is also the Compliance Officer) is responsible for the ICAAP within Makuria and consults with the Finance team to ensure the accuracy of his findings.
The Firm’s senior management formally reviews and approves the ICAAP document on at least an annual basis (or more frequently if there are material changes to the Firm’s business model and risk exposures). The senior management, as part of its review of the ICAAP, sets the Firm’s risk appetite, confirms that the Firm’s key material risks have been considered and assessed, and validates any stress testing scenarios.
Following the completion of the ICAAP, the Firm has concluded that its Tier 1 capital is sufficient to cover its Pillar 1 and Pillar 2 requirements.
Capital Resources
The main features of the Firm’s Capital Resources are as follows:
Capital Item | £'000s |
---|---|
Tier 1 capital less innovative tier 1 capital | 1000 |
Tier 2 capital | 0 |
Tier 3 capital | 0 |
Total capital resources, net of deductions | 1000 |
Remuneration
Makuria must comply with the FCA’s Remuneration Code (“The Code”) as set out in Article 14 of the Alternative Investment Fund Managers Directive (“AIFMD”) and SYSC 19B of the FCA Handbook (“the Code”), as well as SYSC 19C (“the BIPRU Remuneration Code”). The purpose of the Codes is to ensure that firms have risk focused remuneration policies, which are consistent with and promote effective risk management and do not expose themselves to excessive risk. The Firm has reviewed all existing employment contracts to ensure they comply with the Code.
Following an assessment of the size, internal organisation and the nature, scope and complexity of Makuria, the Firm’s Governing Body (the “Management Committee”) has determined that it is not required to appoint a Remuneration Committee. The Firm’s Management Committee shall be responsible for determining appropriate levels of remuneration and for ensuring that the Firm’s Remuneration Policy complies with the requirements of the AIFM Remuneration Code.
Senior management are responsible for setting the Remuneration Policy Statement for all staff and the Compliance Officer is a member of the Management Committee.
The Remuneration Codes can (subject to certain conditions being met) be applied in a proportionate way. As such, senior management has determined that it is not proportionate for the Firm to apply the following detailed rules in setting the Firm’s Remuneration Policy:
SYSC 19B 1.17 – Retained units, shares and other instruments;
SYSC 19B 1.18 – Deferral; and
SYSC 19B.1.19, 19B 1.20 – Performance adjustment
Variable remuneration is not based solely on the financial performance of the individual. Senior management also considered the individuals overall (non-financial) performance to the whole team and the overall results of the Firm. The performance of the individual is assessed over the entire year.
Quantitative Information
The Firm classifies those staff whose professional activities have a material impact on its risk profile as Code Staff in line with the FCA’s Remuneration Code.
During the financial year ending 31 March 2020, the total remuneration paid to Code Staff was £3,617,736. Within such figure, the proportion of the fixed remuneration was £1,129,331. and the proportion of the variable remuneration was £2,488,405.
A refusal to provide us with personal information may, depending on the purpose for which your personal information is required, have various consequences such as us being unable to communicate with you, the termination of any service or other contractual arrangement between us, or, where we have a reasonable suspicion of illegal activity, we may be required to make a report to regulatory or enforcement agencies.
Under Rule 2.2.3R of the FCA’s Conduct of Business Sourcebook, Makuria Investment Management (UK) LLP (“Makuria” or “the Firm”), to the extent it is managing investments for a professional client (as defined by the FCA), is required to include on this website a disclosure about the nature of its commitment to the UK Financial Reporting Council's Stewardship Code (the “Code”) or, where it does not commit to the Code, its alternative investment strategy. The Code is a voluntary code and sets out a number of principles relating to engagement by investors in UK-listed companies.
Makuria operates a value and special situations focused strategy which involves investing in predominantly European opportunities across the capital structures via a broad range of instrument types. Investing in single name UK equities does not, therefore, form a core part of its strategy. As a result, whilst Makuria generally supports the objectives that underlie the Code, they have limited relevance to its strategy. If the Firm strategy changes in such a manner that the provisions of the Code become relevant, the Firm will amend this disclosure accordingly.
Shareholder Rights Directive II
The Pillar 3 disclosure of Makuria Investment Management (UK) LLP (“Makuria” or “the Firm”), is set out below as required by the Financial Conduct Authority’s (“FCA”) “Prudential Sourcebook for Banks, Building Societies and Investment Firms” (“BIPRU”), specifically BIPRU 11. The regulatory aim of the disclosure is to improve market discipline.
Makuria makes Pillar 3 disclosures annually. The information contained in this disclosure is accurate as at December 2022. It has not been audited by Makuria’s external auditors and does not constitute any form of financial statement.
Certain information relating to BIPRU 11.5 may be omitted on the basis that it is deemed to be immaterial or proprietary/confidential. The Firm regards information as material in the disclosure if its omission or misstatement could change or influence the assessment or decision of a user relying on that information for the purpose of making economic decisions. The Firm regards information as proprietary/ confidential if sharing that information with the public would undermine its competitive position. Proprietary/confidential information may include information on products or systems which, if shared with competitors, would render the Firm’s investments therein less valuable. Further, the Firm must regard information as confidential if there are obligations to customers or other counterparty relationships binding the Firm to confidentiality.
The framework consists of three pillars:
As a CPMI firm for the Pillar 1 regulatory capital calculation of credit risk, Makuria has adopted the standardised approach
Background to the Firm/Introduction
The Firm is authorised and regulated by the FCA and as such is subject to minimum regulatory capital requirements. The Firm is categorised by the FCA, for capital purposes, as a Collective Portfolio Management Investment (“CPMI”) firm. It is an investment management firm and has no trading book exposures. The Firm is not required to prepare consolidated reporting for prudential purposes.
Pillar 1 - Minimum Capital Requirements
As a CPMI firm, Makuria has an initial capital requirement of €125k and an ongoing capital resource requirement, which comprises the greater of:
Whichever is the applicable of:
The Firm has deemed the FOR to be the higher of these values and this is therefore used for the purposes of the Pillar 1 calculation.
Pillar 2 – ICAAP
Risk Management Objectives and Policies
Due to the nature, size and complexity of the Firm, does not have an independent risk management function. Senior management are responsible for the management of risk within the Firm and their individual responsibilities are clearly defined. Senior management report to the Firm’s governing body, on a frequent basis regarding the risks. Makuria has clearly documented policies and procedures, which are designed to minimise risks to the Firm and all staff are required to confirm that they have read and understood them.
The ICAAP is the process through which Makuria determines that it is able to identify and manage its key risks on an ongoing basis and ensure that it has sufficient capital in respect of such risks. The process is forward looking and is an integral part of the management of the Firm. The Chief Operating Officer (“COO”) (who is also the Compliance Officer) is responsible for the ICAAP within Makuria and consults with the Finance team to ensure the accuracy of his findings.
The Firm’s senior management formally reviews and approves the ICAAP document on at least an annual basis (or more frequently if there are material changes to the Firm’s business model and risk exposures). The senior management, as part of its review of the ICAAP, sets the Firm’s risk appetite, confirms that the Firm’s key material risks have been considered and assessed, and validates any stress testing scenarios.
Following the completion of the ICAAP, the Firm has concluded that its Tier 1 capital is sufficient to cover its Pillar 1 and Pillar 2 requirements.
Capital Resources
The main features of the Firm’s Capital Resources are as follows:
Capital Item | £'000s |
---|---|
Tier 1 capital less innovative tier 1 capital | 1000 |
Tier 2 capital | 0 |
Tier 3 capital | 0 |
Total capital resources, net of deductions | 1000 |
Remuneration
Makuria must comply with the FCA’s Remuneration Code (“The Code”) as set out in Article 14 of the Alternative Investment Fund Managers Directive (“AIFMD”) and SYSC 19B of the FCA Handbook (“the Code”), as well as SYSC 19C (“the BIPRU Remuneration Code”). The purpose of the Codes is to ensure that firms have risk focused remuneration policies, which are consistent with and promote effective risk management and do not expose themselves to excessive risk. The Firm has reviewed all existing employment contracts to ensure they comply with the Code.
Following an assessment of the size, internal organisation and the nature, scope and complexity of Makuria, the Firm’s Governing Body (the “Management Committee”) has determined that it is not required to appoint a Remuneration Committee. The Firm’s Management Committee shall be responsible for determining appropriate levels of remuneration and for ensuring that the Firm’s Remuneration Policy complies with the requirements of the AIFM Remuneration Code.
Senior management are responsible for setting the Remuneration Policy Statement for all staff and the Compliance Officer is a member of the Management Committee.
The Remuneration Codes can (subject to certain conditions being met) be applied in a proportionate way. As such, senior management has determined that it is not proportionate for the Firm to apply the following detailed rules in setting the Firm’s Remuneration Policy:
SYSC 19B 1.17 – Retained units, shares and other instruments;
SYSC 19B 1.18 – Deferral; and
SYSC 19B.1.19, 19B 1.20 – Performance adjustment
Variable remuneration is not based solely on the financial performance of the individual. Senior management also considered the individuals overall (non-financial) performance to the whole team and the overall results of the Firm. The performance of the individual is assessed over the entire year.
Quantitative Information
The Firm classifies those staff whose professional activities have a material impact on its risk profile as Code Staff in line with the FCA’s Remuneration Code.
During the financial year ending 31 March 2022, the total remuneration paid to Code Staff was £668,813. Within such figure, the proportion of the fixed remuneration was £668,813. and the proportion of the variable remuneration was £0.
A refusal to provide us with personal information may, depending on the purpose for which your personal information is required, have various consequences such as us being unable to communicate with you, the termination of any service or other contractual arrangement between us, or, where we have a reasonable suspicion of illegal activity, we may be required to make a report to regulatory or enforcement agencies.
Under Rule 2.2.3R of the FCA’s Conduct of Business Sourcebook, Makuria Investment Management (UK) LLP (“Makuria” or “the Firm”), to the extent it is managing investments for a professional client (as defined by the FCA), is required to include on this website a disclosure about the nature of its commitment to the UK Financial Reporting Council's Stewardship Code (the “Code”) or, where it does not commit to the Code, its alternative investment strategy. The Code is a voluntary code and sets out a number of principles relating to engagement by investors in UK-listed companies.
Makuria operates a value and special situations focused strategy which involves investing in predominantly European opportunities across the capital structures via a broad range of instrument types. Investing in single name UK equities does not, therefore, form a core part of its strategy. As a result, whilst Makuria generally supports the objectives that underlie the Code, they have limited relevance to its strategy. If the Firm strategy changes in such a manner that the provisions of the Code become relevant, the Firm will amend this disclosure accordingly.