Public HTML RI reports - PRI reporting framework 2020

Fairpointe Capital, LLC (Delisted)

PRI reporting framework 2020

Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - HF 01]

Strategy and Governance

Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]

Direct - Listed Equity Incorporation

ESG incorporation in actively managed listed equities [LEI 01 - 10] Implementation processes [LEI 01 - 10] (A) Implementation: Screening [LEI 04 - 06] (B) Implementation: Thematic [LEI 07] (C) Implementation: Integration of ESG factors [LEI 08 - 10] Outputs and outcomes [LEI 12 - 13]

Direct - Listed Equity Active Ownership

Overview [LEA 01] Engagement [LEA 02 - 08] Outputs and outcomes [LEA 09 - 11] (Proxy) voting and shareholder resolutions [LEA 12 - 21]

Confidence building measures

Confidence building measures [CM1 01 - 07]

Export Public Responses

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.

Yes

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

Select all that apply

Policy components/types

Coverage by AUM

Policy setting out your overall approach

Formalised guidelines on environmental factors

Formalised guidelines on social factors

Formalised guidelines on corporate governance factors

Fiduciary (or equivalent) duties

Asset class-specific RI guidelines

Sector specific RI guidelines

Screening / exclusions policy

Engagement policy

(Proxy) voting policy

Other, specify (1)

Other, specify(2)

Applicable policies cover all AUM

Applicable policies cover a majority of AUM

Applicable policies cover a minority of AUM

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

Your organisation’s definition of ESG and/or responsible investment and it’s relation to investments

Your investment objectives that take ESG factors/real economy influence into account

Time horizon of your investment

Governance structure of organisational ESG responsibilities

ESG incorporation approaches

Active ownership approaches

Reporting

Climate change

Understanding and incorporating client / beneficiary sustainability preferences

Other RI considerations, specify (1)

Other RI considerations, specify (2)

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.

Fairpointe Capital's investment strategy is designed to provide clients with superior investment results over the long-term. Our main objective is to outperform our relative benchmarks, the broader indices and our peers over a full market cycle while managing downside risk.

Fairpointe integrates structured ESG analysis with a bottom-up, fundamental valuation-based approach to investing. We seek companies that adhere to principled corporate governance practices, that are environmentally accountable, and socially responsible. In our fundamental valuation-based analysis, we look for a compelling business model, effective management, financial strength, and attractive valuation. We prefer businesses with products or services that make their customers more efficient or profitable and are critical to their success. Our goal is to select companies with favorable ESG characteristics that are inefficiently priced relative to their earnings growth outlook over the next three to five years.

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]

Key elements of our invesrtment policy include our long-term approach to investing (3-5 years) coupled with our disciplined, fundamental, bottom-up valuation-based process to select companies that are inefficiently priced relative to their earnings growth outlook and the integration of ESG research.

Fairpointe defines ESG as the integration of Environmental, Social and Corporate Governance factors into our investment analysis of portfolio companies. We assess the materiality of various ESG concerns that may impact a company’s financial outlook as well as its reputation. We utilize third party rating service to aid our research, but ultimately determine our own ESG rankings of each company

Fairpointe Capital takes our corporate ESG efforts seriously. In addition to the investment actions that are provided above, we have a committee to look at means to improve our firm’s performance.

Fairpointe Capital works to reduce the firm’s environmental impacts. Efforts include: paper and plastic recycling, battery and toner recycling, encouraging employee use of public transit through pre‐tax qualified transportation benefits, discouraging the use of disposable dishes, use of conference calls instead of travel when possible, indoor plants to help clean and cool the air, and provision of filtered water instead of bottled.

Fairpointe Capital is a majority woman‐owned firm that offers excellent working conditions,employee compensation and benefits. In addition to corporate charitable donations, the firm offers matching donations so that employees can donate to their charities of choice. The firm supports volunteerism and Rock the Street, Wall Street, a financial literacy program for girls.

Fairpointe has an extensive privacy and data security policy. Audits by an outside firm are performed annually and have eight years of unqualified opinions. In addition, we believe our investment in companies and voting of proxies gives us a voice to improve corporate behavior.

We believe that both our internal and community actions should reflect the values that we require for companies we hold in our portfolio.

01.6. Additional information [Optional].

SG 01 CC. Climate risk (Private)

Time horizon of your investment

ESG incorporation approaches

We do not publicly disclose any investment policy components

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.

Yes

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

As a fiduciary, Fairpointe has an affirmative duty of care, loyalty, honesty, and good faith to act in the best interest of its clients. Complinance with this duty can be achieved by seeking to avoid conflicts of interest and by fully disclosing all material facts concerning any conflict that does arise with respect to any client.

All employees have a duty to report potential and actual conflicts of interest to the Compny

Fairpointe Capital employees are prohibited from buying indiviual securities. Employees are able to invest in our strategies via a sub-advised mutual fund managed by the firm. No employee of the Company may accept a directorship of any publicly traded company or otherwise engage in any outside business activity absent approval by the CCO.

Fairpointe has a Code of Ethics in place which outlines specific conflicts of interest.

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios (Private)

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