Shareholder Engagement Policy and Report

How does Kestrel integrate shareholder engagement into its investment strategy?

This policy describes Kestrel’s approach to shareholder engagement where Kestrel decides to invest in companies on behalf of its clients as part of its discretionary investment management services. This policy does not apply to other investment services that Kestrel may provide, such as providing investment advice or the provision of execution-only services, as in those cases the exercise of voting rights is at the discretion of the clients themselves.  This policy only applies to the specific holdings in companies over which Kestrel has discretionary investment management responsibility and control. Kestrel understands that the long-term success of investee companies is supported by effective investor stewardship, high standards of corporate governance and transparent engagement policies.

 

How does Kestrel monitor investee companies on strategy, financial / non-financial performance and risk, capital structure, social & environmental impact and corporate governance?

Fundamental investment research process is undertaken for equity holdings with the aim to develop a deep understanding of investee companies strategy, financial outlook, capital structure, leadership and risks. The research is likely to include a review of a company’s published materials, third party brokers’ written research and conversations with third party analysts.  This research is overseen by the firm’s Investment Committee.

How does Kestrel conduct dialogues with investee companies, exercise voting rights and other rights attached to shares,  cooperate with other shareholders and communicate with relevant stakeholders of the investee companies?

Although Kestrel reserves the right to exercise voting rights for its discretionary clients, Kestrel does not, as a general rule, exercise those rights. Kestrel believes it is not yet of the size and scale of activities to begin engaging directly with investee companies management/board.  Kestrel does not collaborate or communicate with other shareholder groups or other stakeholders in this regard.

The clients’ custodians will offer discretionary clients the option to directly receive shareholder voting/AGM information for all EEA equity holdings.

 

How does Kestrel manage actual or potential conflicts of interest in relation to its engagement?

As a regulated entity, Kestrel is required to identify, manage and disclose conflicts of interest that may arise in the context of providing services to our clients, as well as to establish appropriate criteria for determining the types of conflicts of interest whose existence may give rise to a material risk of damage to the interests of a client, taking appropriate action, including in some cases not proceeding with the activity. Kestrel has a separate Conflicts of Interest Policy in place to manage this.

Annual Engagement Report 2024

Kestrel did not engage in any proxy voting on behalf of discretionary clients during the year. Kestrel currently has no plans to begin proxy voting, but it will continue to monitor its approach.