GuardCap - Guardian Capital

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GUARDCAP UCITS FUNDS PLC – SEMI-ANNUAL REPORT AND UNAUDITED FINANCIAL STATEMENTS

GUARDCAP UCITS FUNDS PLC – ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS

Privacy and Cookies Policy

GUARDCAP ASSET MANAGEMENT LIMITED

GuardCap Asset Management Limited (the “Firm“, “we“, “us” or “our“) is committed to protecting the privacy of individuals whose data it processes (“you” or “your“).

1.         IMPORTANT INFORMATION AND WHO WE ARE

This privacy policy aims to give you information on how the Firm collects and processes your personal data as a controller.

In addition, it outlines your data protection rights under applicable data protection laws in the UK, including the retained UK law version of the General Data Protection Regulation ((EU) 2016/679) (“UK GDPR“) and the UK Data Protection Act 2018.

This website is not intended for children and we do not knowingly collect data relating to children.

Due to the nature of its business, the Firm has determined that it does not require a statutory Data Protection Officer given the limited amount of personal data that it processes. However, the Firm’s Compliance Team shall be responsible for overseeing the implementation of this policy and for monitoring compliance with this policy and with data protection law.

2.         CATEGORIES OF DATA SUBJECTS

(A)       CLIENTS AND INVESTORS

The following section of this policy sets out how the Firm, as controller of personal data supplied by, and collected in relation to, clients as well as shareholders and potential investors in the funds we manage (“Funds“) and other persons whose information is provided to us by or on behalf of the clients or Funds, will process such personal data.

Types of information we may hold

We may hold personal data about clients (and those working for clients) as well as investors in the Funds which is provided to us by you directly as a result of your being a client and/or holding an investment in a Fund. Information may be obtained by (i) correspondence in respect of the services we provide; and/or (ii) completing and submitting application forms for the Fund(s), and/or through our website, recorded and monitored telephone calls, collation of due diligence as a result of holding your investment and/or you corresponding with us. It also may be collated or provided to us by third parties for credit and money laundering checks and compliance purposes, such as screening. We may also process personal data about individuals that are connected with our clients and the Funds and/or you as an investor (for example directors, trustees, employees, representatives, beneficiaries, shareholders, investors, clients, beneficial owners or agents).

We may collect, store, and use some or all of the following categories of personal information about you: contact details (including name, title, address, telephone number, personal email address), your date of birth, copies of passport, driving licences and utility bills, bank account details and details relating to your investment activity and personal identifiers such as your social security number, national insurance number, tax file number and IP address.

In limited cases, we also collect what is known as “special categories” of information. Our money laundering, sanctions, financial crime and fraud prevention checks sometimes result in us obtaining information about political opinion, actual or alleged criminal convictions and offences.

You are not obliged to provide us with your information where it is requested but we may be unable to provide certain products and services or proceed with our business relationship with you if you do not do so. Where this is the case, we will make you aware.

How we will use information about you

Your personal data may be processed by the Firm or its sub-processors (or any of their affiliates, agents, employees, delegates or sub-contractors) for the following purposes:

  • to administer your investment in accordance with your instructions and/or in order to perform a contract we have entered into;
  • to allow us to administer and manage investments (including fee calculations and the payment of dividends and other corporate actions) which are necessary for the Firm to comply with applicable laws and/or are in its legitimate interest to allow us to provide our services to the clients and Funds we manage;
  • to update and maintain records for the Firm, including maintaining statutory registers, which is necessary to comply with the Firm’s legal obligations;
  • to carry out anti-money laundering checks and other actions in an attempt to detect, prevent, investigate and prosecute fraud and crime and verify your identity, in order to comply with the Firm’s legal obligations, for the performance of a task being carried out in the public interest and/or to pursue the Firm’s legitimate interests (including for the prevention of fraud, money laundering, sanctions, terrorist financing, bribery, corruption and tax evasion);
  • to scan and monitor emails sent to us (including attachments) for viruses or malicious software, to process and encrypt personal data to protect and manage email traffic, and to store personal data on our systems to pursue our legitimate interests including for document retention purposes; and
  • such other actions as are necessary to manage the activities and/or to comply with the legal obligations of the Firm, including by processing instructions, monitoring and recording electronic communications (including telephone calls and emails) for quality control, analysis and training purposes and enforcing or defending the rights and/or interests of the Firm, in order to comply with the Firm’s legal obligations and/or to pursue the Firm’s legitimate interests such as use in connection with the Firm’s internal management and reporting, to administer, operate, facilitate and manage your account(s) with us and your use of our services and products, to facilitate our internal business operations, including assessing and managing risk and fulfilling our legal and regulatory requirements and to pursue the legitimate interests of the Firm in relation to the prevention of fraud, money laundering, terrorist financing, bribery, corruption, tax evasion and to prevent the provision of financial and other services to persons who may be subject to economic or trade sanctions.

To the extent that such personal data contains special category data (such as data relating to racial or ethnic origin, political opinion, or religious or philosophical belief), the processing of such data shall solely be for the purpose of complying with any duty imposed on us and/or the Funds by law (such as anti-money laundering and combatting the financing of terrorism). In limited circumstances, we may ask for your explicit written consent to process special category personal data and we shall inform you of our intended purpose(s) of processing such data at the relevant time.

We may only use information relating to criminal convictions where the law allows us to do so. We may use information relating to criminal convictions where it is necessary in relation to legal claims, where it is necessary to protect your interests (or someone else’s interests) and you are not capable of giving your consent, or where you have already made the information public.

Some of the above grounds of processing will overlap and these may be several grounds which justify how we use your personal data.

The Firm does not anticipate being required to obtain your consent for the processing of your personal data as listed above. If the Firm wishes to use your personal data for other purposes which do require your consent, the Firm will contact you to request this.

 (B)      VISITORS TO OUR WEBSITE

The following section of this policy sets out how the Firm may process personal data (as a controller) about visitors to its website and/or individuals who contact the Firm using the contact information provided on the website.

Types of information we may hold

We may collect, use, store and transfer different kinds of personal data about you which you provide to us though our website, such as your name, address, email address, telephone numbers, technical data (including internet protocol (IP) address, login data, browser type and version, time zone setting and location, browser plug-in types and versions, operating system and platform and other technology on the devices you use to access this website.

We do not collect any special categories of personal data about you through our website.

How we collect your data

We use different methods to collect data from and about you including through direct interactions when you contact us using our contact details provided on the website, and through cookies, server logs, pixel tags and other similar technologies (which we may use to collect technical data about your equipment, browsing actions and patterns).

How we will use information about you

Your personal data may be processed by the Firm or its sub-processors (or any of their affiliates, agents, employees, delegates or sub-contractors) for the following purposes:

  • to provide you with any information that you have requested, in order to perform a contract with you;
  • to send you updates on the performance of the Firm, newsletters, invitations to events and other marketing communications which we will do only with your consent;
  • to use data analytics to improve our website, marketing and user experiences on the basis of our legitimate interests;
  • to comply with legal or regulatory requirements;
  • to scan and monitor emails sent to us (including attachments) for viruses or malicious software, to process and encrypt personal data to protect and manage email traffic, and to store personal data on our systems to pursue our legitimate interests including for document retention purposes; and
  • such other actions as are necessary to manage the activities of the Firm, including by processing instructions, monitoring and recording electronic communications (including telephone calls and emails) for quality control, analysis and training purposes and enforcing or defending the rights and/or interests of the Firm, in order to comply with its legal obligations and/or to pursue its legitimate interests.

If we consider it necessary to obtain your consent in relation to the use of your personal data (such as for sending emails to individuals that have not invested in the Firm), we will contact you to request this consent. Details of how to withdraw your consent are set out below.

Processing on the basis of legitimate interests

Where such processing is being carried out on the basis that it is necessary to pursue the Firm’s legitimate interests, such legitimate interests should not override your interests, fundamental rights and freedoms.

Links to websites

Where the website provides links to other websites, the Firm is not responsible for the data protection/privacy/cookie usage policies of such other websites, and you should check these policies on such other websites if you have any concerns about them. You should always exercise caution and review the privacy policy applicable to the website in question.

Cookies

A cookie is a small file that a website sends to your computer and is stored by your web browser, which it then sends back to the website. Cookies allow us to save your login state, stated country, username, preferences, and other navigational details, and also allow us to measure how you use the website so that it can be improved based on your needs and the aggregate browsing behaviour of our website users. Cookies are encrypted, and only Firm web servers can read them.

The browsers of most computers, smartphones and other web–enabled devices are usually set up to accept cookies. If your browser preferences allow it, you can configure your browser to accept all cookies, reject all cookies, or notify you when cookies are set. Each browser is different, so check the “Help” menu of your browser to learn about how to change your cookie preferences. However, please remember that cookies are often used to enable and improve certain functions on our website. If you choose to switch certain cookies off, it may affect how our website works and you may not be able to access all or parts of our website.

Further information about cookies (including how to turn them off) can be found at www.allaboutcookies.org.

3.         DISCLOSURES OF YOUR PERSONAL DATA

We may disclose personal data we hold about you:

  • to other entities within our group;
  • to providers of investment products or services, including fund administrators, registrars, printers and similar service providers;
  • to our IT and other service providers;
  • to our professional advisers;
  • in the event that we sell or transfer any business or assets, in which case we may disclose personal data we hold about you to the prospective and actual buyer of such business or assets; and/or
  • if we are permitted by law to disclose your personal data to that third party or are under a legal obligation to disclose your personal data to that third party (including without limitation to any of our regulators).

4.         DATA RETENTION

We will only retain your personal data for as long as necessary to fulfil the purposes we collected it for, including for the purposes of satisfying any legal, accounting, or reporting requirements. To determine the appropriate retention period for personal data, we consider the amount, nature, and sensitivity of the personal data, the potential risk of harm from unauthorised use or disclosure of your personal data, the purposes for which we process your personal data and whether we can achieve those purposes through other means, and the applicable legal requirements.

5.         INTERNATIONAL TRANSFERS

Some of the third parties to whom we transfer personal data may be based outside the UK and/or the European Economic Area (EEA) so their processing of your personal data may involve a transfer of data outside the UK and/or EEA.

Whenever your personal data is transferred outside the UK and/or EEA by us, we ensure a similar degree of protection is afforded to it by ensuring at least one of the following safeguards is implemented:

  • we will only transfer your personal data to countries that have been deemed to provide an adequate level of protection for personal data by the European Commission or UK Secretary of State; or
  • where we use certain service providers, we may use specific contracts approved by the European Commission or UK Secretary of State which give personal data the same protection it has in Europe and/or the UK.

Please contact us if you want further information on the specific mechanism used when transferring your personal data outside the UK and/or EEA.

6.         DATA SECURITY

The Firm has put in place measures to ensure the security of the personal data it collects and stores about you. It will use its reasonable endeavours to protect your personal data from unauthorised disclosure and/or access, including through the use of network and database security measures, but it cannot guarantee the security of any data it collects and stores.

We have put in place appropriate security measures to prevent your personal data from being accidentally lost, used or accessed in an unauthorised way, altered or disclosed. In addition, we limit access to your personal data to those employees, agents, contractors and other third parties who have a business need to know. They will only process your personal data on our instructions and they are subject to a duty of confidentiality.

We have put in place procedures to deal with any suspected personal data breach and will notify you and any applicable regulator of a breach where we are legally required or consider it appropriate to do so.

7.         YOUR LEGAL RIGHTS

In certain circumstances, by law you have the right to:

  • request access to your personal information (commonly known as a “data subject access request”). This enables you to receive a copy of the personal information we hold about you and to check that we are lawfully processing it;
  • request correction of the personal information that we hold about you. This enables you to have any incomplete or inaccurate information we hold about you corrected;
  • request erasure of your personal information. This enables you to ask us to delete or remove personal information where there is no good reason for us continuing to process it. You also have the right to ask us to delete or remove your personal information where you have exercised your right to object to processing (see below);
  • object to processing of your personal information where we are relying on a legitimate interest (or those of a third party) and there is something about your particular situation which makes you want to object to processing on this ground. You also have the right to object where we are processing your personal information for direct marketing purposes;
  • request the restriction of processing of your personal information. This enables you to ask us to suspend the processing of personal information about you, for example if you want us to establish its accuracy or the reason for processing it;
  • request the transfer of your personal information to another party; and
  • withdraw your consent. If we are processing your personal data on the basis of your consent, you have the right to withdraw such consent at any time. Withdrawing your consent will not affect the lawfulness of processes based on consent before its withdrawal. To withdraw your consent or to opt out of receiving marketing communication, please contact us at [email protected]. Once we have received notification that you have withdrawn your consent, we will no longer process your information for the purpose or purposes you originally agreed to, unless we have another legitimate basis for doing so in law.

If you wish to exercise any of the rights set out above, please contact the Compliance Team at [email protected].

We try to respond to all legitimate requests within one month. Occasionally it may take us longer than a month if your request is particularly complex or you have made a number of requests. In this case, we will notify you and keep you updated. You will not have to pay a fee to access your personal data (or to exercise any of the other rights). However, we may charge a reasonable fee if your request is clearly unfounded, repetitive or excessive. Alternatively, we may refuse to comply with your request in these circumstances.

We may need to request specific information from you to help us confirm your identity and ensure your right to access your personal data (or to exercise any of your other rights). This is a security measure to ensure that personal data is not disclosed to any person who has no right to receive it.

8.         CHANGES TO THIS PRIVACY NOTICE

We may update this privacy notice from time to time, and will communicate such updates through our website. We may also notify you from time to time about the processing of your data.

9.         QUERIES AND COMPLAINTS

If you have any queries about this policy or your personal data, or you wish to submit an access request or raise a complaint about the way your personal data has been handled, please first contact your GuardCap relationship manager. If you would like to escalate any matter, you can also contact our Compliance Team at [email protected] or write to us at 11 Charles II Street, St James’, London, SQ1Y 4NS, marking your letter for the attention of the Compliance Team.

You also have the right to make a complaint at any time to your local data protection authority (in the UK, the Information Commissioner’s Office (ICO) (www.ico.org.uk)) if you consider that the processing of your personal data carried out by us or the administrator of any other service provider to us, has breached data protection laws. We would, however, appreciate the opportunity to deal with your concerns before you approach any of the supervisory authorities so please contact us in the first instance by emailing [email protected].

UK Stewardship Code

GuardCap Asset Management Limited UK Stewardship Code

GuardCap Asset Management Limited Statement on the UK Stewardship Code

Pillar 3 Disclosure

Executive Summary

GuardCap Asset Management Limited (the “Firm”) is authorised and regulated by the Financial Conduct Authority (the “FCA”). The Firm is categorised as “BIPRU Firm” for capital purposes and reports on a solo basis. The Firm’s Pillar 3 disclosure fulfils the Firm’s obligation to disclose to market participants’ key pieces of information on a firm’s capital, risk exposures and risk assessment processes.

We are permitted to omit required disclosures if we believe that the information is immaterial such that omission would be likely to change or influence the decision of a reader relying on that information. In addition, we may omit required disclosures where we believe that the information is regarded as proprietary or confidential. In our view, proprietary information is that which, if it were shared, would undermine our competitive position. Information is considered to be confidential where there are obligations binding us to confidentiality with our customers, suppliers and counterparties.

We have made no omissions.

Unless otherwise stated all figures are as at 31 December 2021, the Firm’s financial year end.

Risk Management

The Firm’s Directors determine its business strategy and the level of risk acceptable to the Firm. In conjunction with the Chief Operating Officer, they have designed and implemented a risk management framework that recognises the risks that the business faces and how those risks may be monitored and mitigated and assess on an ongoing basis. The Firm has in place controls and procedures necessary to manage those risks.

The Firm considers the following as key risks to its business:

Business risk – The funds under management are subject to redemption by investors. While the Firm continues to market its funds there is no guarantee that subscriptions will exceed redemptions. This risk is mitigated by the diversity of the Firm’s clients and portfolios.

The Firm has a small number of staff making it important to reward and retain key employees and this is supported by the Firm’s longer-term remuneration policies and benefits package. Business risks are assessed and mitigated as part of the Internal Capital Adequacy Assessment Process (”ICAAP”).

Market risk – The Firm’s principal exposure to market risk is through its holdings of Collective Investments in Transferable Securities. In addition, there is an indirect exposure to financial markets because the Firm’s investment management fee income is calculated based on the value of funds under management. This risk is mitigated by our investment strategies which typically demonstrate risk characteristics that are lower than the market but nonetheless we are still exposed to market volatility.

Operational risk – The Firm is exposed to operational risks which may arise from loss of revenue or unexpected increases in operating expenditure. The Firm guards against revenue loss through high quality customer servicing and following agreed investment strategies.

Credit risk – The Firm is exposed to credit risk in respect of balances held by the Firm’s bankers and to fund custodians and distributors for unpaid management fees. This risk is mitigated by the fact that all cash is held in UK regulated financial institutions and most receivables arise from management fees due from regulated entities or institutional clients who the directors consider maintain a high standard of credit worthiness.

Liquidity Risk – Liquidity risk arises from having insufficient cash resources to meet liabilities as they fall due. This risk is managed through the preparation of monthly cashflow forecasts. With strong positive inflows forecast for 2022, liquidity risk going forward is assessed to be low.

Concentration risk – The Funds are exposed to the possible risk inherent in the concentration of the investment portfolios in a small number of industries, investment sectors and/or countries. The Firm manages/moderates this risk through a careful selection of securities in several investment sectors within established ranges and through compliance with UCITS diversification criteria.

Currency exchange risk – The Firm’s investment strategies are largely invested in assets outside Sterling, and the fee revenue earned is therefore subject to the fluctuation of Sterling against these underlying currencies. This is a risk which the business cannot and therefore does not mitigate. The Firm is also exposed to currency exchange rate risk in respect of non-Sterling cash balances and its fund management fee income which is earned in currencies other than Sterling.

The Firm manages these risks by monitoring cash flows to ensure unnecessary foreign currency balances are kept to a minimum.

Regulatory Capital
The Firm is small with a simple operational infrastructure. Its market risk is limited to foreign exchange risk on its accounts receivable in foreign currency, and credit risk from management fees receivable from the funds under its management and fee investment in shares issues by GuardCap UCITS Funds Plc.

The Pillar 1 capital requirement is the higher of:

  1. the base capital requirement of €50,000;
  2. the sum of market and credit risk requirements; and
  3. the Fixed Overhead Requirement (“FOR”).

The Pillar 2 capital requirement is calculated by the Firm as representing any additional capital to be maintained against any risks not adequately covered under the requirement in Pillar 1 as part of its ICAAP. When making this calculation, the Firm also takes into account the own funds requirement detailed above, in particular where the own funds exceeds Pillar 1 capital (and the extent to which the Firm is able to use capital instruments to fulfil both requirements). No additional capital is required in excess of the Pillar 1 capital requirement.

It is the Firm’s experience that its Pillar 1 capital requirement has previously normally consisted of the FOR, with market and credit risks being reviewed periodically. The Firm applies a standardised approach to credit risk, applying 8% to the Firm risk weighted exposure amounts, consisting mainly of investment management and performance fees due but not paid, and bank balances. Having performed the ICAAP, the Firm has concluded that no additional capital is required in excess of its Pillar 1 capital requirement.

As at 31st December 2021 the Firm’s regulatory capital position is:

ICAAP

The Firm’s ICAAP assesses the adequacy of its internal capital to support current and future activities. This process includes an assessment of the specific risks to the Firm, the internal controls in place to mitigate those risks and an assessment of whether additional capital mitigates those risks. The Firm also considers a wind down scenario to assess the capital required to cease regulated activities.

As the Firm has shares in the GuardCap UCITS Funds plc, the credit risk is the principle factor determining the firm’s capital requirement. Our capital requirements (credit and market risk) are currently £9,272,000 which is well within the level of regulatory capital held.

We consider this amount to be sufficient regulatory capital to support the business and have not identified any areas which give rise to a requirement to hold additional risk based capital.

The Firm’s ICAAP is formally reviewed by the Directors annually, but will be revised should there be any material changes to the Firm’s business or risk profile.

Remuneration

Given the nature and small size of our business, remuneration for all employees is set by the Directors of the Firm. The Firm formally reviews the performance of all employees and based thereon determines each employees overall level of remuneration and the split of that between base salary, bonus, etc. in compliance with the FCA Rules on remuneration.

Given that the Firm has only one business area, investment management, all remuneration disclosed in our audited financial statements is from this business area.

The aggregate level of remuneration earned by all staff in 2021 is ÂŁ14,842,925 and this is disclosed in our audited financial statements.

The Firm is subject to the BIPRU Remuneration Code (“the Code”), has applied proportionality and, pursuant to this application and where relevant, has dis-applied various provisions of the Code.

March 2022

GuardCap Modern Slavery and Human Trafficking Statement

For the financial year ended 31st December 2021

Overview

In accordance with s.54 of the Modern Slavery Act 2015, this statement outlines the actions taken by GuardCap Asset Management Limited (“GuardCap” or “the Firm”) in the previous financial year to ensure that business and supply chains do not include the use of modern slavery or human trafficking. GuardCap is committed to the principles set out in the code and strongly oppose any form of slavery or human trafficking.

This statement will be updated at least annually.

About GuardCap

GuardCap is an investment manager, authorised and regulated by the Financial Conduct Authority (FCA). The Firm is a sub-threshold AIFM, undertaking MiFID activities and is
focused solely on managing concentrated, bottom up, strategies constructed on an “index-agnostic” basis for institutional investors. GuardCap is a wholly owned subsidiary of Guardian Capital Group Limited, a Canadian group which was founded in 1962 and whose shares are quoted on the Toronto Stock Exchange.

Business and Supply Chain

Considering the nature of business that GuardCap is involved in, management deems there to be a low risk of modern slavery or human trafficking existing within the Firm’s supply chain. Regardless of this, careful consideration is taken when making decisions regarding the selection of our suppliers. The main third party suppliers used within the business relate to professional services firms such as brokers, accountants, lawyers and compliance advisers. The Firm also uses third party firms for support services such as IT, payroll and recruitment.

Policy and Approach

GuardCap is committed to ensuring that slavery and human trafficking does not exist within its supply chain. In addition to being bound by FCA regulations, the Firm and its employees abide by internal policies set out in its compliance manual that promotes integrity and professional behaviour. Our recruitment process ensures that all employees have been screened and referenced and staff training is completed regularly, including making staff aware of their duty to report any suspected breaches of ethical principles.