Compliance with the FRC Stewardship Code

Investec Asset Management (“IAM”) welcomes the FRC Stewardship Code and we believe we are in compliance with the majority of the code. Our Stewardship Statement sets out our approach:

Investec Asset Management exists for one single purpose: to manage “other people’s money” (third party assets) in such a way that we deliver on their mandate. Although these mandates are often quite specialised, the essential purpose of our work is to preserve and grow the real purchasing power of the assets entrusted to us by our clients over the long term. In fulfilling this purpose we will assume a stewardship role over the assets of our clients, including the effective exercising of their ownership rights.  We will monitor, evaluate and, if necessary, actively engage or withdraw capital to preserve or add value to our clients’ portfolios.

As a firm we will seek to play a meaningful role in helping to develop the framework for investment and ownership within the various jurisdictions in which we invest.  Where appropriate we will seek to influence the development of policy, regulation and laws, aiming to facilitate the deployment of efficient capital markets and the development of favourable environments for shareholder rights and interests.

As such we endorse the OECD principles on corporate governance, which represent a broad set of standards that are appropriate for most markets. We will communicate and engage with our clients on how we are fulfilling these responsibilities. After all, we are stewards of their money. In representing our clients’ interest in relation to the investments made on their behalf, we recognise the responsibilities that go with ownership, and the related  rights within an approach which is cognisant of the broad environmental, social and systemic context in which we function. By virtue of the fact that the majority of our investment activity takes place in the public markets, we will publicly disclose our stewardship policy and our voting record.

We have set out below a more detailed response to the principles of the Code.

  • Principle 1

    Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities.

    Investec Asset Management discloses our policy on stewardship through our stewardship statement and stewardship policy. This deals in detail with the relevant integration of stewardship in our investment processes, our policy on voting and the fact that we believe the application of any code, in any jurisdiction, should be on a comply or explain basis.

  • Principle 2

    Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed.

    The Investec Asset Management Stewardship Policy covers our conflicts of interest policy and the Investec Asset Management Corporate Governance Committee deals with any conflicts of interest that arise. A copy of our Conflicts of Interest Policy and Code of Ethics is available from the Head of Compliance.

  • Principle 3

    Institutional investors should monitor their investee companies.

    Investec Asset Management’s portfolio managers monitor and, where appropriate, engage with investee companies. This monitoring may include an assessment of the strategic governance of the companies in which we invest and includes a clear audit trail of voting where applicable. Investec Asset Management does not generally attend company AGMs but will do so when we consider this necessary or appropriate.

  • Principle 4

    Institutional Investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.

    Investec Asset Management’s proxy guidelines provide a comprehensive review of those areas where we believe escalation may be necessary. However, we do not have a set approach for how this will happen as the circumstances and method may be different both across issues and over time.

  • Principle 5

    Institutional investors should be willing to act collectively with other investors where appropriate.

    Investec Asset Management may work with other shareholders from time to time to promote good governance and to prevent the destruction of value. When seeking to resolve any issue our preference is always to achieve it in a manner that is not detrimental to our own holding. Investec Asset Management also believes that the “concert party” defence by boards in certain jurisdictions is typically unfounded.

  • Principle 6

    Institutional investors should have a clear policy on voting and disclosure of voting activity.

    The Investec Asset Management Stewardship Policy and Investec Asset Management Proxy Guidelines set out our policy on voting. We aim to vote as many shares as are practical given local market regulations (e.g. around share blocking). The implementation of the Investec Asset Management Proxy guidelines is facilitated by our proxy voting partner.

  • Principle 7

    Institutional investors should report periodically on their stewardship and voting activities.

    Investec Asset Management is very supportive of clients that take an active interest in fulfilling their ownership responsibilities and while reporting is customised to meet specific requirements, it is our intention to make sure clients are kept well informed on a timely basis on how their ownership responsibilities are being fulfilled.

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Compliance with the FRC Stewardship Code (1291 Kb)