Mirabaud Investment Management Limited UK Stewardship Code

Mirabaud Investment Management Limited
UK Stewardship Code
June 2011
MIRABAUD Investment Management Limited 33, Grosvenor Place London SW1X 7HY T +44 (0)20 7321 2506 F +44 (0)20 7930 4064
Authorised and regulated by the Financial Services Authority Registered in England No. 1631005 VAT No. 714 3841 46
Directors: Giles Morland Marc Pereire John Owens Jeremy Lodwick Philip Watson Company Secretary: Ann Horsington
www.mirabaud.com

Introduction
This document sets out how Mirabaud Investment Management Limited, (“MIML”) engages with investee
companies on behalf of its underlying clients under the U.K. Stewardship Code, (“the Code”), which was issued by
the Financial Reporting Council in July 2010.
We have set out below our approaches to each of the seven principles of the Code.
Principle 1: Institutional investors should publicly disclose their policy on how they will discharge their
stewardship responsibilities
As part of the due diligence process, Mirabaud will never invest in a business without having met the senior
management in order to discuss the principal economic, industry and business-specific factors that will influence the
future success of the business. The investment managers will monitor these factors on an on-going basis and will
look to meet with the senior management of investee companies at least once per year.
We view ourselves as being actively engaged with senior management to promote the success of the business.
Generally speaking, this engagement is constructive and will be focused on issues such as capital expenditure,
expansion strategy, remuneration policy and operational oversight. Where we do not feel that these issues are
being adequately addressed by the senior management we will make our views clear to them and will, in the very
rare cases where this leaves us dissatisfied, raise the issue with the company’s board. Should we remain unhappy
with the management of the business we will sell the shares and as part of our investment process, we invest in
liquid assets allowing us to exit positions in an orderly manner.
In the majority of cases we are happy to be guided by the recommendations of ISS Governance when voting.
However, where this is in conflict with the specific instructions of a client or where we believe it is not in the longterm
best economic interests of shareholders we will vote accordingly.
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.
Conflicts of interest are kept to a minimum as we will specify engagement and voting requirements with any clients
for whom this could present an issue. This could result in either a zero holding or a benchmark weighting in the
clients’ own shares. We will look to vote in the interests of long-term, independent shareholders unless we are
instructed by a particular client to act in a particular way. In the exceedingly rare case that voting for the best
interests of one client would not be in the best interests of another client we will always vote for each client in their
own best interests as long-term investors.
Mirabaud Investment Management’s ownership structure is such that there is no conflict of interest between our
clients’ investment interests and the position of Mirabaud Investment Management. This includes the policy on
underwriting new stock issues. Where we decide to sub-underwrite a new stock issue for a client, all shares and all
commissions will be allocated to the client in question. Mirabaud Investment Management will never underwrite on
its own account.
Mirabaud as with other regulated investment managers maintains a written conflicts of interest policy in
accordance with the MiFID requirements.
Principle 3: Institutional investors should monitor their investee companies

Mirabaud’s principal concern is the health of the underlying investee companies as this is the foundation for the
success of our clients’ investments. This monitoring is done on an ongoing basis through meetings with company
management at least once per year and more frequently for larger investments. The investment managers will also
meet with investee companies’ peers, competitors and customers in order to monitor the ongoing health of the
investee company. The investment managers will have several hundred company meetings each year. In addition,
the investment managers will maintain regular contact with the company broker as well as investment analysts
with particular industry expertise to monitor industry events.
Following these meetings the investment managers will brief their colleagues and document any material findings.
Should any issues of concern arise, these will be pursued and recorded in a more formal process with the
Compliance Department being kept informed.
Matters of corporate governance are considered prior to an initial investment being made and then monitored on
an annual basis, or as events require. We endeavour to ensure that the structure and composition of the varying
forms of oversight (board structure, management structure, audit, etc.) are such that we are confident that investors
will be made aware of developments within the business in a timely manner and that the management team are
acting promptly and effectively, in shareholders’ best long-term interests. As part of this monitoring / research
process there could be occasions on which the investment managers could obtain inside information; the
investment managers will always strive to ensure that this is not done without their prior knowledge and is not
done in such a way as to compromise their ability to transact in investee company shares.
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
Mirabaud Investment Management seeks to be actively engaged with the companies in which it invests. In cases
where we have minor concerns regarding business activity we will feed this back to the company through their
senior management, senior board members or corporate advisors depending upon which channel we view as most
appropriate and effective. We may also engage with other shareholders to ensure a common message is being
relayed to the company. Should our concerns escalate beyond this we will seek to exit the investment. We are very
reluctant to make any of these communications public.
In the case of businesses in which we decide not to invest we will reflect our concerns to the senior management
and to their advisors.
Principle 5: Institutional investors should be willing to act collectively with other investors where
appropriate
Generally speaking we prefer to engage directly and constructively with the investee company; however, where we
feel it appropriate we will engage with other shareholders to ensure a common message is being made firmly to the
investee company. During the course of these discussions our objective is always to ensure the best long-term
outcome for our clients and to avoid compromising our ability to act in our clients’ best interests, such as by
obtaining inside information.
Principle 6: Institutional investors should have a clear policy on voting and disclosure of voting activity

We will always seek to ensure all our clients fully exercise their voting rights and, as indicated above, will vote in
line with the direction of the ISS Governance, except where this conflicts with specific instructions from the client or
with the best interests of our long-term investors.
In cases where our clients will have a material impact on the vote we will inform the company of our voting
intentions ahead of the vote. In addition, we will also advise the investee company of cases in which the
recommendations of the ISS Governance are contrary to the best interest of long-term investors.
A full disclosure of all voting activity, highlighting the reasons behind the decisions taken, is made to our clients on
a quarterly basis, or more frequently if required.
Principle 7: Institutional investors should report periodically on their stewardship and voting activities
Full disclosure of voting records is made to clients annually, or more frequently if required. We do not provide
details through disclosures in our annual financial statements.
Further Information
For further information please feel free to contact Mirabaud Investment Management Limited on 020 7321 2506 to
speak to our Marketing Director.