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JK Capital Management Limited

PRI reporting framework 2020

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

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

The firms’ management style is based on convictions and completely benchmark agnostic. Portfolios are constructed following a disciplined bottom-up process that combines:

  • Quantitative filters
  • Qualitative analysis
  • On site due diligence
  • Regular contact with companies
  • Careful attention to corporate governance.

JKC’s expertise relies on its extensive track record and its constant engagement on the ground with the companies it covers (the team of 8 investment professionals have over 700 company meetings every year).

We are following a rigorous Due Diligence process through on-site visits, a careful attention paid to corporate governance, numerous channel checks combined with a bottom-up process combining quantitative filters and qualitative analysis. Quality of Corporate Governance has always been the bedrock of JK Capital’s investment approach. We have increasingly incorporated an E and S consideration to claim a full ESG integration.

By being signatories of Board Diversity Hong Kong Initiative, our aim is to build a constructive relationship with company Boards and Management to foster a greater awareness and acceptance of the business value of diversity

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

JKC’s investment policy revolves around fundamental bottom up stock picking based on strict due diligence criteria among which key elements of corporate governance dominate, including but not limited to corporate transparency, a high level of disclosure in the financial statements, easy access to management, to employees, to offices and factories, long term sustainability of the business model, a strong emphasis on social governance including increasing usage of renewable and/or clean energy and of water treatment facilities and efforts to achieve board diversity.

Our Responsible investment approach is also determined by the following principles:

Materiality impact : ESG does not follow the principle of “one size fits all”. We believe at JK Capital that it is not relevant to look at the same indicators to assess all companies’ sustainable performance. We use an adaptive framework to drive our ESG research. We use the SASB Materiality tool and we adapt it to Asia’s specificities to base our Materiality assessment.

Markets specificities : JKCM covers 15 markets across Asia. The ESG standards and approaches can differ from one country and one regulator to another. Indeed we cannot avoid the fact that requirements from regulators and stock exchanges across Asia differ in terms of ESG disclosure. Therefore, having a specific understanding of the ESG framework of each country JK Capital invests in is a key element to develop relevant analysis that will be different from one invested company to another. Hence, both local regulations and local market practices have to be taken into account when analysing company’s disclosure and when performing on-site visits.

Negative screening : JK Capital Management applies exclusion filters to its equity investment universe. Such filters include controversial weapons, thermal coal production and tobacco.

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


SG 02. Publicly available RI policy or guidance documents

 

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

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].


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.

The following methods of dealing with conflicts of interest and controlling access to confidential information are acceptable:

 

  1. General or implied disclosure in a customer document or agreement that JK Capital may have a material interest or a conflict in a transaction;
  2. Specific disclosure of an interest or conflict to a customer either in writing or orally before JK Capital advises or exercises discretion on behalf of that customer. This will usually be necessary in highly sensitive transactions. JK Capital must be able to demonstrate that it has taken reasonable steps to ensure the customer does not object (as opposed to merely notifying him) to that interest or conflict. In consequence, a written acknowledgement should be obtained from the customer as far as possible; or
  3. Declining to act.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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