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Edinburgh Partners Limited

PRI reporting framework 2017

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.4. Indicate what norms you have used to develop your investment policy that covers your responsible investment approach.

other (1) description

          The UK Stewardship Code set out by the Financial Reporting Council in 2010.

01.6. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Edinburgh Partners recognises that it has a fiduciary duty to act in the best interests of its clients. Part of this responsibility involves ensuring that assets under our stewardship are managed in a way which maximises shareholder value.

Our approach is pragmatic and necessarily flexible given differences between countries in terms of regulation and also the individual circumstances of the company involved. Our assessment of the quality of investee companies in the areas of environmental considerations, socially responsible investment and corporate governance is embedded in our investment process. In practice, discharging these responsibilities includes analysis of financial statements and careful consideration of all proposals and resolutions requiring a shareholder vote. We will also seek to engage with board members or senior management on various issues where appropriate.

All of these actions are used to derive scores for corporate governance, socially responsible investment and environmental factors which feed into the ultimate investment decision. As our investment process is driven primarily by long-term valuation, all our analysis of ESG factors is undertaken with a view to their potential impact on valuation. These scores and any supporting discussion are retained as part of our proprietary database and are made available to clients as part of the reporting process.

It includes reference to conflicts of interest. In the evaluation of corporate governance and voting issues, our focus is the fiduciary duty we have to our clients.  Our policies as described apply, irrespective of any potential conflicts of interests.

Our proxy voting policy addresses potential conflicts of interest by its adoption of and reliance on the proxy voting guidelines of a specialist third party (Institutional Shareholder Services (“ISS”)) and the day to day implementation of those guidelines by ISS.  The procedures provide that, where a portfolio manager decides to vote out of line with an ISS recommendation, any potential conflicts of interest are considered, the rationale behind the decision is fully documented and retained as well as being reported to the relevant clients.

Policy statement is available via our website

SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

02.4. Additional information [Optional].

We do have an Investment Process for clients which we are happy to share but it is currently not available on our website.

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Edinburgh Partners has a duty to take all reasonable steps to identify and manage conflicts of interest which can arise between a firm, its employees and its clients as well as those conflicts which exist between different clients of a firm.

This Policy is designed to meet Edinburgh Partners regulatory requirements in relation to the identification and management of conflicts of interest and to ensure Edinburgh Partners always act in the best interests of their clients.

All members of staff are responsible for considering the business activities within their area and the possibility for conflicts to arise.  Where a possible conflict of interest arises, staff should report this immediately to the Regulatory and Operational Risk team who will consider what action (if any) requires to be taken. Depending on the situation this could require the disclosure of the conflict to clients, refraining from taking a course of action or documenting the potential conflict in the firm’s conflicts matrix. 

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

          If we believe that an incident is likely to have a detrimental impact on shareholder return and thus on our clients’ interests, then there are a number of courses of action available. These might include:

•	Entering into a more active dialogue with company management
•	Writing to the company management to explain our concerns and action proposed
•	Voting against company management
•	Selling our holding
•	Collaborative action

On a quarterly basis we produce an exception report which is generated for clients listing every stock in their portfolio which is not scored 3 (average) by our analyst.  The reasons underlying the score attributed are detailed for environmental, SRI and corporate governance factors.  We also document the stocks on which there has been engagement with company management, with a description of the matters discussed.