The Shareholder Rights Directive II (“SRD II”)

The Directive took effect in June 2019 and falls under COBS 2.2B in the UK.  It applies, broadly, to Portfolio Managers, UCITS Management Companies and Full Scope AIFMs.  SRD requires Firms that invest in shares that trade on an UK/EU regulated market, in addition to ‘comparable’ markets outside the UK/EU, to develop and publicly disclose an engagement policy or publicly disclose a clear and reasoned explanation of why it has chosen not to comply with this requirement. 

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Given the similarity with the UK Stewardship Code, which is at present not deemed relevant to the type of activity undertaken by the Firm, whilst Castlebar Capital LLP supports the objectives of SRD II it has been decided not to comply with SRD at the current time.   The firm pursues a multi-asset class European focused event-driven strategy, focusing on hard catalyst events across the capital structure.  The firm believes that its approach to the voting rights attached to the shares that it holds for its clients will often be consistent with the principles of effective stewardship and long-term investment decision-making because decisions that create value in a company around catalyst events will typically align with long-term value realisation in the company.

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Many of the elements that are explained in an engagement policy are fundamental aspects of Castlebar’s approach to research and investment analysis.  However, the Firm has determined that, because of the nature of its investment strategy, it would not be in the best interests of its clients to adopt and disclose an engagement policy, or disclose information on how it has exercised voting rights.

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This position is subject to annual review, in conjunction with the Stewardship Code, and any change to the current strategy of the Firm will be taken into account.

 

For further information on the Firm’s approach please contact the Firm’s Compliance Officer, Coralie Yeo, at: Coralie.Yeo@castlebar-capital.com.