Stewardship Code

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Conduct of Business Sourcebook rule 2.2.3R requires BlueDrive Global Investors LLP (“the Firm”) to include a disclosure on its website stating the nature of its commitment to the UK Financial Reporting Council's Stewardship Code (the "Code") or, where it does not commit to the Code, its alternative investment strategy.

 

The Code sets out seven principles to enhance the quality of engagement between institutional investors and companies and promote efficient governance.  The principles require institutional investors to:

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• Publicly disclose their policy on how they will discharge their stewardship responsibilities.

• Have and publicly disclose a robust policy on managing conflicts of interest in relation to stewardship.

• Monitor their investee companies.

• Establish clear guidelines on when and how they will escalate their activities.

• Be willing to act collectively with other investors where appropriate.

• Have a clear policy on voting and disclosure of voting activity.

• Report periodically on their stewardship and voting activities.

 

Compliance with the Code is voluntary but where investors choose not to comply with one or more of the principles, they must publish on their websites statements:

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• Justifying their non-compliance; and

• Setting out their alternative investment strategy.

 

Although the Firm generally supports the principles of the Code, it has decided that it would not be appropriate to commit to it.

 

The Firm provides investment management services to a Cayman Island domiciled fund, investing in long/short equities and equity-like instruments in various jurisdictions, including the UK.  It must, therefore, apply a consistent global approach when engaging with issuers and their management in all the jurisdictions in which it invests.  It would not be appropriate for it to commit to a code of practice that applies to a specific jurisdiction.

 

For further information on the Firm’s investment and governance approach, please contact the Firm’s Compliance Officer at info@bluedriveglobal.com.

 

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Shareholders Rights Directive II (‘SRD II’) Engagement Policy

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Introduction

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This statement sets out BlueDrive Global Investors LLP (‘BlueDrive’, ‘the Firm’ or ‘we’) approach in meeting the requirements (‘Engagement Policy’) set out in SRD II (Directive (EU) 2017/828, and summarised in the FCA Handbook under COBS 2.2B.6) in relation to investments in shares traded on a regulated market (a term which extends to non-EU markets which are comparable to EU regulated markets and where the financial instruments dealt in are of a quality comparable to those in a UK regulated market).

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BlueDrive is a discretionary portfolio manager/full-scope UK AIFM authorised and regulated by the Financial Conduct Authority (‘FCA’) as a Full-scope Alternative Investment Fund Manager (‘Full-scope AIFM’).

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Integration of shareholder engagement in investment strategy

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The Firm conducts rigorous analysis of investment targets prior to investment. Such an analysis may entail the need to directly engage with senior management of that company to discuss finances, future prospects, etc.

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Monitoring and Dialogue with Investee Companies (Strategy, Financial and Non-Financial Performance Risk, Capital Structure and ESG)

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BlueDrive’s investment team conducts a number of meetings with the portfolio companies both in person and conference calls. During these meetings, we discuss a broad range of issues including but not restricted to strategies for long term growth, capital allocation, financing plans and corporate governance best practices. We also address social and environmental issues, focusing on areas where we believe the greatest areas of concern are. The breadth and depth of our ESG engagement is due to increase, as we are currently finalising our formal ESG Policy.

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The focus is on long term measures and to encourage companies to focus on creating the most amount of value for all stakeholders as opposed to short term profit maximisation that endangers the long-term health of the business.

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There may instances when we are of the view that the portfolio companies have room for improvement. In such cases, we would initially discuss our concerns directly with management. If management do not provide a satisfactory response or fail to respond to our concerns, we will then assess whether the issue is significant enough to change the investment case. If the issue is deemed significant enough to change the investment case, we would then make a decision whether to continue to hold the company and vote against the measure or to sell our shares in the company entirely.

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Exercise of Voting Rights

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Any resolution proposed by a portfolio company which is subject to a shareholder’s vote will be considered by the Firm, making use of input from relevant portfolio manager(s) and analyst(s). In arriving at a voting decision, the Firm will arrive at one that it is believed will be in the best interests of the portfolios (‘Best interests rule’ in COBS 2.1). The voting decision may well involve abstaining or voting against management if their actions and objectives do not match up with what we believe to be in the best interests of shareholders. The Firm will provide an annual disclosure which details our voting behaviour except where a particular vote is deemed to be insignificant as to either subject matter e.g. the appointment of directors or as to size (3% of share capital).

 

Cooperation with Other Shareholders

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Generally, the firm does not adopt an activist approach with other shareholders; although the Firm remains open to doing so if this would be deemed to be in the best interests of shareholders.

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Communication with Relevant Stakeholders of Investee Companies

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We do not typically communicate directly with staff - save for those instances identified above (see “Monitoring and Dialogue with Investee Companies”) - customers or suppliers of any portfolio company directly.

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Conflicts of Interests

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The Firm maintains a Conflicts of Interest Policy which can be shared upon request.

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Other

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This Engagement Policy will be reviewed and updated as necessary, at least annually. For any question regarding this policy email info@bluedriveglobal.com. Policy last updated: March 2021.