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UFG Asset Management

PRI reporting framework 2020

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Investment process

HF 06. ESG data, research and other resources used

Please describe the ESG resources and tools used in your investment decision-making process.
Category of ESG
Reason for use
          We use ESG for investment analysis in stock picks and decision making processes vis-a-vis derivatives strategies, shorting, exposure and tail risk management.
        
          We use ESG research to manage potential risks and ensure capital preservation.
        
          
        
          
        
Select and explain how these resources are incorporated into the investment and risk management process?
Category of ESG
Investment/risk management process
Additional text (optional)
ESG data (proprietary, 3rd party, etc.)
          
        
ESG research (broker, etc.)
          
        

HF 07. ESG incorporation into quantitative and fundamental analysis

07.1. Does your organisation uses quantitative analysis?

07.2. Does your organisation uses fundamental analysis?

Please indicate at which level ESG is incorporated into the analysis.
Fundamental approach
ESG incorporation
Outcomes and assessment/review
          We use ESG factors mainly to evaluate the quality of corporate governance and we try to avoid investing in companies which have bad track record and evidence of non-prudent and dishonest management, decision making, etc.
        

07.3. Additional information [OPTIONAL]


HF 08. Changes to the RI incorporation process over the past 12 months

08.1. Could you please indicate whether there have been any changes to your RI incorporation process over the past 12 months (e.g. additional resources, information sources)?

08.3. If not, please explain.

          Russian market investment environment is rather stagnant and we are holding to a conservative strategy focused first and foremost on capital preservation and reducing market volatility.
        

HF 09. Integration of Active Ownership

09.1. Please select and explain how active ownership practices are integrated into investment decisions.


HF 10. Examples of ESG risks/opportunities in investment decisions

10.1. Please provide examples of where ESG risks and opportunities were incorporated into the investment decisions over the past 12 months.

Hedge Funds Strategy
Equity Hedge|Event driven
ESG factors
Governance
ESG risks/opportunities
          We focus on governance principles, such as company’s leadership, executive pay, audits, internal controls and shareholder rights, especially minority shareholders rights which are often neglected by many Russian companies
        
Financial risks
          Neglecting prudent corporate governance and minority shareholders' rights impacts debt sustainability of the company and its dividend policy
        
Scope and process
          Our mission is to act in the best interests and incorporate company strategy and corporate governance of top-management and controlling shareholders
        
Outcomes
          Bad corporate governance may lead to high debt burden, no dividends, and finally negative share price performance of the company
        

10.2. Based on your example(s) provided above, please specify whether the incorporation of ESG factors affected the risk-adjusted returns of your hedge funds.


HF 11. Derivatives products and ESG impact

11.1. Do you use derivatives instruments as part of your hedge funds strategies and/or Funds of Hedge Funds?

Please select all the applicable categories of derivatives used.
Listed/OTC
Category of derivatives

11.3. Please explain whether and how these derivatives impacted the risk-adjusted returns of your hedge funds investments?

Impact

Outcomes

          Use of put options on benchmark market index decreases fund volatility and allows to get better returns rather than long only funds deliver in Russia
        

11.4. Please indicate whether the use of derivatives triggered ESG risks/opportunities at the fund level?

11.5. Additional information [OPTIONAL]

          
        

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