UK Stewardship Code Disclosure

This statement outlines the Firm’s position with respect to the UK Stewardship Code (the “Code”), which was published by the Financial Reporting Council (“FRC”) in July 2010 and amended in 2012 and 2020. Under Rule 2.2.3R of the FCA’s Conduct of Business Sourcebook, the Firm is required to make a public disclosure about the nature of its commitment and level of compliance to the Code or, where it does not commit to the Code, to explain its alternative investment strategy.

The Code is a voluntary code, which aims to enhance the quality of engagement between asset owners/asset managers and listed companies in the UK, to help improve long-term risk-adjusted returns to shareholders and the efficient exercise of governance responsibilities. It sets out good practice on engagement with investee companies and is to be applied by firms on a “apply and explain” basis. It also describes steps that asset owners can take to protect and enhance the value that accrues to the ultimate beneficiary.
The FRC recognises that capital is invested in a range of asset classes over which investors have different terms and investment periods, rights and levels of influence. Hence the Code does not solely apply to equity investments.

The FRC also recognises that not all parts of the Code will be relevant to all institutional investors and that smaller institutions may judge some of the principles and guidance to be disproportionate. It is of course legitimate for some asset managers not to engage with companies, depending on their investment strategy.

The Code comprises twelve Principles that can be summarised as follows:

Purpose and governance 1. Purpose, strategy and governance

2. Governance, resources and incentives

3. Conflicts of interest

4. Promoting well-functioning markets

5. Review and assurance

Investment approach 6. Client and beneficiary needs

7. Stewardship, investment and ESG integration

8. Monitoring managers and service providers

Engagement 9. Engagement

10. Collaboration

11. Escalation

Rights and Responsibilities 12. Exercising rights and responsibilities

Zetland provides services which are generally concerned with the management of special situation opportunities in a number of jurisdictions, the aim of which is the realisation of these assets. As such the number of occasions on which the Firm will be involved in UK equity or fixed income investments, will be limited.

So, whilst Zetland supports the broad objectives of the Code, many of its provisions have limited applicability to Zetland’s investment strategy. Consequently, Zetland has chosen not to formally commit to the Code.

Should this change in a manner that the provisions of the Code become more relevant, Zetland will review its commitment and amend this disclosure accordingly.

September 2022