MIRABAUD Asset Management Limited

MIRABAUD ASSET MANAGEMENT LIMITED

PILLAR 3 – DISCLOSURES

Based on independently audited accounts as at 31 December 2016

Contents

1.1. Overview ...................................................................................................................................................................................... 4

1.2. Scope of disclosures ................................................................................................................................................................... 4

1.3. Materiality .................................................................................................................................................................................... 4

1.4. Proprietary or Confidential Information........................................................................................................................................ 5

1.5. Frequency and Verification .......................................................................................................................................................... 5

1.6. Means of Disclosure .................................................................................................................................................................... 5

1.7. Corporate Background ................................................................................................................................................................ 5

2. RISK ANALYSIS ..................................................................................................................................................................................... 5

2.1. Corporate Governance Arrangements Board Composition and Diversity .................................................................................. 5

2.2. Risk Management Objectives and Policies ................................................................................................................................. 5

2.3. Credit Risk ................................................................................................................................................................................... 6

2.4. Settlement Risk ........................................................................................................................................................................... 7

2.5. Market Risk.................................................................................................................................................................................. 7

2.6. Operational Risk .......................................................................................................................................................................... 7

2.7. Liquidity Risk ............................................................................................................................................................................... 7

2.8. Interest Rate risk ......................................................................................................................................................................... 7

2.9. Business Risk .............................................................................................................................................................................. 8

2.10. Reputational Risk ........................................................................................................................................................................ 8

3. CAPITAL REQUIREMENTS ................................................................................................................................................................... 9

3.1. Regulatory Capital Requirement and Accounting ....................................................................................................................... 9

3.2. Own Funds ................................................................................................................................................................................ 10

4. REMUNERATION ................................................................................................................................................................................. 11

4.1. Overview .................................................................................................................................................................................... 11

4.2. Identification of Remuneration Code Staff ................................................................................................................................ 11

4.3. Remuneration Structure and the Link between Pay and Performance (CRR Article 450(b)) ................................................... 11

4.3.1. Back Office and Administration Staff ................................................................................................................................... 12

4.3.2. Private Wealth Portfolio Management Staff ......................................................................................................................... 12

4.3.3. Fund Management Staff ...................................................................................................................................................... 12

4.3.4. Marketing & Sales Staff ....................................................................................................................................................... 12

4.4. Aggregate quantitative information on remuneration ................................................................................................................ 12

1. INTRODUCTION AND BACKGROUND

1.1. Overview

The capital requirements directives established a regulatory capital framework across the European Union governing the amount and nature of capital that credit institutions and investment firms must maintain. In the United Kingdom, the Financial Conduct Authority (“FCA”) regulates firms, including Mirabaud Asset Management Ltd (“MAML”), as these are affected by the directives. From 1 January 2014, with the implementation of the Capital Requirement Directive IV (“CRDIV”), the relevant regulations are:

the Capital Requirements Regulation (EU) No 575/2013 (“CRR”); the IFPRU sourcebook of the FCA Handbook; and additional standards released by the European Banking Authority.

The capital requirements framework consists of the following three “pillars”:

Pillar 1 sets out the minimum capital requirements that firms are required to hold to meet credit, market and operational risk.

Pillar 2 requires firms to assess whether they should hold additional capital against risk not covered in Pillar 1. This is determined by a firm’s undertaking the Internal Capital Adequacy Assessment Process (“ICAAP”). The FCA will review and evaluate the ICAAP as part of the Supervisory Review and Evaluation Process.

Pillar 3 requires firms to disclose publicly certain details about their risks, capital, and risk management arrangements. The Pillar 3 disclosure requirements are contained in CRR Articles 431 to 455.

The objective of this disclosure is for MAML to meet its Pillar 3 disclosure requirements.

1.2. Scope of disclosures

The disclosures included herein relate to MAML, which is authorised and regulated by the FCA with Firm Reference No 122140, and its wholly owned unregulated subsidiary Mirabaud Asset Management Nominees Ltd (“MAMNL”) (together, the “MAML Group”). Disclosures in this document will be on a consolidated basis, with individual entity disclosures being made where relevant or where it is considered helpful.

Readers of this document may find it helpful to read it in conjunction with the MAML audited financial statements and MAMNL unaudited financial statements both of which are available on the Companies House website. However, readers should note that this document is itself not subject to independent verification by the MAML Group’s auditors.

1.3. Materiality

CRR Article 432(1) provides that a firm may omit one or more of the disclosures if the information provided by such disclosures is not regarded as “material”. Information will be considered to be material if its omission or misstatement could change or influence a decision or assessment of a user relying on the information for making economic decisions. Notwithstanding this exemption, firms must always provide

the information required by CRR Article 435 (2)(c) on diversity policy, CRR Article 437 on own funds and CRR Article 450 on remuneration.

1.4. Proprietary or Confidential Information

CRR Article 432(2) provides that a firm may omit one or more disclosures if the information provided by such disclosures is regarded as proprietary or confidential. Information is regarded as proprietary if disclosing it publicly would undermine its competitive position. This includes information on products or systems where sharing such information may make the firm’s investments in these less valuable. Information is regarded as confidential if the firm has an obligation of confidentiality to customers or counterparties. Notwithstanding this exemption, firms must always provide the information required by CRR Article 437 on own funds and CRR Article 450 on remuneration.

1.5. Frequency and Verification

The MAML Group will update and publish these disclosures at least annually and more frequently if events require this to be the case. Such events could include changes in the nature, scale and complexity of the MAML Group’s operations, its range of activities, its global presence, involvement in different financial sectors, participation in international financial markets and payment, settlement and clearing systems, or significant changes to its regulated activity permissions.

1.6. Means of Disclosure

These disclosures have been prepared for the purpose of fulfilling the MAML Group’s disclosure requirements under Pillar 3 of the CRR. The MAML Group’s Boards of Directors (the “MAML Group Board”) has approved the disclosures.

The disclosures are published on the website at https://www.mirabaud.com/en/international-presence/country-detail/country/united-kingdom/.

1.7. Corporate Background

As detailed in the MAML Group accounts, the majority of the MAML Group’s revenues are derived from ad valorem fees on funds and mandates under management.

2. RISK ANALYSIS

2.1. Corporate Governance Arrangements Board Composition and Diversity

When selecting senior managers and members of the Boards, the MAML Group considers a range of criteria, including relevant skills and background as well as expertise and knowledge of the business. In addition, the MAML Group takes into account the benefits of diversity as set out in its Equal Opportunities Policy.

2.2. Risk Management Objectives and Policies

The MAML Group’s operational structure and management ethos has evolved over time on the basis of a conservative approach to risk and a correspondingly proportionate attitude to risk taking. This is embodied in a strong risk management culture within the MAML Group, which is evidenced by prudently

considered opportunities to expand the business, whilst acknowledging and actively managing the risks involved in such decisions.

The assessment of risk and its mitigation ultimately rests with the MAML Group Board, which meets quarterly. The MAML Group Board provides oversight and takes responsibility for the strategic leadership of the MAML Group within a framework of good corporate governance and prudent and effective controls that enable risk to be assessed and managed within the MAML Group’s risk appetite.

Senior Management of MAML are accountable to the MAML Group Board for designing, implementing and monitoring the process of risk management. They are also responsible for communicating the MAML Group’s approach and commitment to an effective risk management framework and approach.

In addition to the formal oversight provided by the MAML Group Board, the Senior Management takes an active role in identifying, monitoring and investigating matters related to risk management. They are aided in this by the Operations Committee.

In addition, the MAML Group’s parent’s Compliance and Risk function and MAML Group Internal Audit function, both based in Geneva, Switzerland, provide wider Mirabaud Group oversight of risk and control issues at MAML Group level.

Managers of departments have open channels to members of the Board, Senior Management and the Compliance Department to feed back any information related to risk and to raise any issues or concerns that they may have regarding risks posed to the MAML Group, its clients, operating model and employees. In light of the limited size, scale and complexity of the MAML Group’s UK operations, the Board of MAML Ltd has not established a separate risk committee but will instead deal with matters related to risk directly within the ambit of a dedicated MAML Group Risk Officer employed by Mirabaud Asset Management (Suisse) S.A. seconded to MAML Group but based in Geneva.

The MAML Group has in place policies, procedures and practices in order to identify, measure, manage and monitor risk. These are encapsulated in the ICAAP and Compliance Monitoring Programme and are proportionate given the nature of the MAML Group’s activities and risk tolerance.

The MAML Group is confident that the current risk assessment and management processes are adequate with regard to the MAML Group’s profile and strategy.

The MAML Group has identified the following as key categories of risks to which the MAML Group is exposed and has adopted the following strategies and processes to manage these.

2.3. Credit Risk

Credit risk is the risk that an amount due from a third party is lost on the default of that person.

To mitigate this risk, the MAML Group regularly monitors amounts due from its clients, bankers or suppliers and promptly refers any issues regarding late or delayed payment to Senior Management for resolution.

The MAML Group’s material exposure is to counterparties in the EEA, with most balances falling due within one month and up to three months for discretionary investment management clients. Bank balances are repayable to the MAML Group upon demand.

2.4. Settlement Risk

Settlement risk is a sub-category of credit risk. Settlement risk is the risk that on the settlement date a counterparty defaults on its obligation to make payment for a securities transaction after the MAML Group has fulfilled its obligation to the counterparty. This risk is mitigated by the fact that the vast majority of trades entered into by the MAML Group are on a delivery versus payment basis.

In addition the MAML Group has controls in place to reduce the risk of non-settlement. Any delays in settlement are rectified promptly (including closing out positions), such that there is no material impact on the MAML Group. Where the MAML Group uses third party brokers to execute trades, these are executed on an agency basis, which ensures that even in the event of a default of the third party broker, executed but unsettled trades should be settled in accordance with the relevant market default rules.

2.5. Market Risk

The MAML Group is not directly exposed to market risk as it does not undertake trade book activities for its own account or hold any principal trade book positions (unless such positions arise exceptionally on the rectification of trading errors conducted on an agency basis for its clients). From time to time the MAML Group may receive warrants and shares in lieu of cash fees on a non-trade book basis. These positions are subject to market risk up to the total carrying value of the positions. Whilst the MAML Group endeavours to dispose of these positions at the earliest possible opportunity, often regulatory and commercial restrictions may prevent this. The value of these warrants and shares have not been considered within our liquidity management policy.

2.6. Operational Risk

Operational risk is the risk of loss due to inadequate or failed internal processes, people or systems or from external events. Although the MAML Group is not subject to a formal operational risk requirement under the CRD IV, the MAML Group does have strong operational controls in place to manage and mitigate these risks. The MAML Group also maintains a detailed risk register to help monitor, manage and mitigate operational risk issues, and to record, monitor and evaluate operational risk incidents.

2.7. Liquidity Risk

Liquidity risk is the risk the MAML Group will not be able to meet its financial obligations as they fall due or that access to liquid funds is not available on commercially viable terms. This risk affects the MAML Group at various levels, ranging from the requirement to have sufficient funds to settle its daily and short-term liabilities as they fall due to the funding required for longer-term strategic plans.

The MAML Group mitigates liquidity risk by ensuring that it has access to various sources for funding. The MAML Group maintains its liquid capital as cash deposits at banks and does not currently use longer term deposits or fixed income instruments. The MAML Group has a detailed liquidity management policy and a liquidity contingency plan in place.

2.8. Interest Rate risk

Interest rate risk is the risk that changes in interest rates will adversely affect the MAML Group’s financial position. Because the MAML Group’s funding requirements mean that its bank balances need to be readily accessible the MAML Group does not place significant amounts on time deposit. In addition, any

borrowings or facilities the MAML Group has in place with its bankers exist to facilitate the MAML Group’s normal trading activities and are generally used for short-term business-related funding requirements.

The MAML Group had no other significant form of borrowings during the year to or as at 31 December 2016. As such, the impact on the MAML Group of interest rate risk relates to the impact that changes in interest rates have on the level of its interest income and interest expense rather than to the risk of mismatch between assets and liabilities.

2.9. Business Risk

Business risk is the risk that the MAML Group will have lower than expected profits or will experience a loss. The MAML Group addresses this risk by ensuring that the MAML Group’s overall strategy is decided upon by the MAML Group Board acting in in conjunction with the MAML Group’s Swiss parent, Mirabaud SCA. To mitigate business risk and strategic risk, the MAML Group gives careful consideration to all strategic decisions. All available information is reviewed and discussed by the MAML Group Board and Senior Management where appropriate. Before introducing any new product or business line, the MAML Group will thoroughly assess all potential risks, financial or operational, and the systems necessary to minimise these risks. Implementation of day-to-day strategy is carried out by the CEO and Senior Management.

2.10. Reputational Risk

Reputational risk is the risk of loss resulting from damage to the MAML Group’s reputation. As a good reputation is difficult to build and establish but very easy to lose, the MAML Group seeks actively to mitigate its reputational risk. The MAML Group expects all partners, officers and employees to conduct themselves professionally and with integrity at all times. The MAML Group expects all partners, officers and employees to maintain a good relationship with clients and potential clients as well as third parties, including competitors, lawyers, accountants, bankers, regulators, and HM Revenue and Customs.

Reputational risk is managed through strong top-down corporate governance. The MAML Group Board is responsible for setting the tone, actively supporting reputational risk awareness and reinforcing a risk management culture by creating awareness at all levels of the MAML Group.

More specifically the MAML Group endeavours to respond promptly and accurately to all third parties be they regulators, clients or other oversight professionals. Any issues are handled in accordance with FCA procedures and the MAML Group’s complaints handling procedure. The MAML Group Board would be informed of any significant complaints received, how these are being dealt with, and any risks arising as a result.

Other practical mitigation techniques include thorough vetting of new staff members, periodic vetting of established employees, strict know-your-customer and formal account opening procedures to ensure the MAML Group transacts only with appropriate counterparties and to ensure maintenance of a comprehensive system of internal controls and practices, including the upkeep of a detailed risk register and conflicts registers.

3. CAPITAL REQUIREMENTS

3.1. Regulatory Capital Requirement and Accounting

The regulatory capital requirements consist of two pillars. Pillar I sets out the minimum capital requirements that firms must meet to cover credit, market and operational risk. Pillar II requires firms to assess whether they should hold additional capital to cover risks not covered by Pillar I. These are calculated as part of a firm’s ICAAP process. The FCA may review and evaluate the firm’s ICAAP as part of the Supervisory Review and Evaluation Process.

The MAML Group’s Pillar I capital resources requirement are the higher of

the MAML Group’s Fixed Overhead Requirement (“FOR”); the sum of its Credit, Market and Risk requirements (the MAML Group is not subject to

an Operational Risk Requirement); and the Base Capital Resources Requirement.

Currently the MAML Group’s Pillar I requirements are based on FOR calculated on the aggregation method.

The MAML Group calculates its Pillar II capital requirements as part of its ICAAP process. This includes an assessment of the operational risk requirements not necessary under Pillar II.

Mirabaud Asset Management Ltd

£m

Credit Risk 0.185

Market Risk 0.047

Sum of Credit/Market Risk 0.232

Fixed Overhead Requirements 2,012

Pillar 1 Requirement 2,012 The MAML Group’s accounting reference date is 31 December. The assumptions used in the assessments are that accrued income is invoiced and receivable within the 90 days and any illiquid assets are included in the credit risk capital calculation.

3.2. Own Funds The MAML Group has always taken a very conservative view of its level of regulatory capital, ensuring that there has at all times been more than sufficient liquid capital to meet its regulatory requirements. The MAML Group’s capital resources comprise Tier One Capital in the form of issued and fully paid share capital or partners’ capital and audited reserves (including if prudent audited net interim profits). Internally, the MAML Group has determined an amount of audit reserves that are not available for distribution. The MAML Group’s solo and consolidated capital resources are calculated in accordance with IFPRU resources table for an investment group deducting material holdings. The following table sets out Mirabaud Asset Management Limited’s capital resources:

As at 31 December 2016, the MAML Group and firm held £4,093m (2015: £4,025m) Tier One Capital and £nil (2015: £nil) Tier Two Capital, respectively, which exceed the capital requirement.

4. REMUNERATION

4.1. Overview

In accordance with the remuneration disclosure requirements of Article 450 of the CRR, the MAML Group provides the following disclosures regarding its remuneration policy and practices for those categories of staff whose professional activities have a material impact on its risk profile. As an IFPRU €125K Limited Licence Firm, MAML is placed into Proportionality Level 3 pursuant to the FCA’s rules, thus allowing the MAML Group to disapply certain remuneration requirements.

MAML has a Remuneration Policy Statement and the MAML Board assumes the responsibilities for the implementation of the policy, incorporating compliance considerations in accordance with the principles of the FCA’s Remuneration Code set out at SYSC 19A of the FCA Handbook.

4.2. Identification of Remuneration Code Staff

The MAML Group has identified the following categories of staff to be Remuneration Code Staff within the meaning of the FCA’s Remuneration Code:

Individuals who perform significant influence functions (“SIFs”). Currently these include FCA Approved Persons fulfilling Controlled Functions (CF1 to CF12 (inclusive) and CF28 to CF29 (inclusive)) within the MAML Group including any seconded or contracted personnel. Staff who are CF30s only are excluded.

Senior managers, who fulfil oversight functions that are not SIFs (e.g. Head of Human Resources, Head of Finance).

Risk takers, defined as those members of staff whose professional activities could have a material impact on the firm's risk profile.

All staff whose total remuneration takes them into the same bracket as Senior Management and whose activities could have a material impact on the firm’s risk profile.

The MAML Group is also required to consider whether additional individuals, such as special advisors, may fall within the definition of Remuneration Code Staff. The MAML Group has identified 4 Non-Executive Directors who are considered to be Remuneration Code Staff, but who are not entitled to variable compensation.

The MAML Group reviews the list of Remuneration Code Staff at least annually and more frequently as required, for example, when new senior staff are recruited.

For financial year 2016, the MAML Group had identified 31 Remuneration Code Staff of which 20 are entitled to variable compensation.

4.3. Remuneration Structure and the Link between Pay and Performance (CRR Article 450(b))

MAML awards staff a combination of fixed and variable compensation. The fixed portion is sufficient to allow MAML’s variable compensation to be entirely flexible. MAML sets variable compensation in a way that takes into account individual performance (both qualitative and quantitative), the performance of the

relevant business unit and MAML’s overall results. MAML has four variable compensation schemes in place, each described below. All bonuses, when paid out, are paid in cash.

4.3.1. Operations & Management Staff

Variable remuneration is determined by an evaluation of the individual’s non-financial performance criteria. Remuneration is also directly linked to the performance of the MAML Group as a whole and may be varied according to an increase or decrease in profits.

During financial year 2016, two Operations & Management Remuneration Code Staff were entitled to variable compensation under this scheme.

4.3.2. Private Wealth Portfolio Management / Relationship Management Staff

Variable remuneration is made up of a share of the revenue generated net of costs or a share of the assets under management generated. Remuneration is also directly linked to the performance of the individual and of the MAML Group as a whole and may be varied according to an increase or decrease in profits.

During financial year 2016, three private wealth portfolio management / relationship management Remuneration Code Staff was entitled to variable compensation under this scheme.

4.3.3. Fund Management Staff

Variable remuneration consists of a share in a pool of variable remuneration linked to the performance objectives compared to benchmarks and/or peer groups and the amount of assets under management. Remuneration is also directly linked to the performance of the individual and the MAML Group as a whole and may be varied according to an increase or decrease in profits. A percentage of the variable remuneration, subject to a minimum total compensation threshold, is deferred and payable over three years.

During financial year 2016, thirteen fund management Remuneration Code Staff were entitled to variable compensation under this scheme.

4.3.4. Marketing & Sales Staff

Variable remuneration is based on revenues generated by the acquisition and retention activity of the Sales managers. Remuneration is also directly linked to the performance of the individual and the MAML Group as a whole and may be varied according to an increase or decrease in profits.

During financial year 2016, two Remuneration Code Staff was entitled to variable compensation under this scheme.

4.4. Aggregate quantitative information on remuneration

CRR 450(g) requires the MAML Group to disclose the total amount of remuneration per business area:

CRR 450(h) requires the MAML Group to disclose the following additional information about the amount of remuneration. The total amount of remuneration paid out in the financial year was a total of £3,912,122 to 31 Remuneration Code Staff. Of this, £2,490,000 was fixed and £1,422,000 (£302,720 deferred) was

variable remuneration. Where paid, variable remuneration was paid out in cash only. For the financial year 2016, £302,720 of deferred remuneration was awarded and £683,620 was outstanding, of which £0 is vested and £683,620 unvested.

Not one individual was awarded remuneration in excess of GBP 1 million.