REGULATORY INFORMATION

Stewardship and Social Responsibility

Kennox takes its management and stewardship responsibilities seriously.  As such, we believe it is important to remain up to date on issues impacting our investee companies, and to engage with them where appropriate.  We assess any issue in terms of its impact to the long term value of an underlying company and thus the value of our clients’ holdings.

At Kennox we also believe that good long-term performance of companies is directly related to their approach to good governance, ethical and environmental responsibility and consideration of social impact. As such, when specific SRI issues are identified Kennox will consider these in relation to other investment factors.

Our approach to stewardship and SRI is encapsulated in the following principles which are embedded in our investment philosophy:

  • We regularly monitor our investee companies.
  • We evaluate any situation which arises and are willing to engage with the company directly.
  • We are willing to act collectively with other investors where appropriate.
  • We will always vote in the long term interests of our clients and will record what decisions we have taken in this respect. We do not normally make those decisions public.

Treating Customers Fairly (TCF)

We are committed to delivering the highest level of client service and, as a core part of this commitment, Kennox fully embraces the Financial Conduct Authority’s (FCA) Treating Customers Fairly (TCF) guidelines.
In all our dealings, we strive to ensure that:

  • Clients receive a prompt and courteous service, provided by fully competent and professional staff members
  • Clients receive a clear description of our investment approach, our sole product (the Kennox Strategic Value Fund) and our performance objectives
  • Our fees and charges are transparent and fairly described and disclosed in Fund sales and marketing literature
  • All client questions are dealt with fairly and honestly

Fundamental to this commitment are our robust compliance and risk monitoring procedures carried out by our well qualified operation team who work closely with the industry specialists we have appointed.

Pillar Three

Introduction

Kennox maintains a capital reserve requirement to ensure continuity in Kennox’s operations.  Pillar 3 is one part of the capital program at Kennox.
The FCA states: “Pillar 3 complements the minimum capital requirements (Pillar 1) and the supervisory review process (Pillar 2). Its aim is to encourage market discipline by developing a set of disclosure requirements which will allow market participants to assess key pieces of information on a firm’s capital, risk exposures and risk assessment processes. The disclosures are to be made to the market for the benefit of the market.”
http://www.fsa.gov.uk/Pages/About/What/International/basel/info/pill3/index.shtml

Risk Categories

Operational Risk
Kennox conducts, and regularly reassesses, a complete review of all areas of our operations to ensure that operational risks have been identified, recorded, and that our compliance procedures limit the risk where possible.

Business Risk
As Kennox is paid according to the assets under management of the fund that we run, a fall in asset prices or the loss of significant accounts are our most significant risks.

Credit Risk
Kennox is paid monthly and individual payments are not threatening to the continuity of Kennox.  Kennox controls credit risk by ensuring prompt payment, and by reviewing the financial strength of our current client.  As for our bank deposits, we only have deposits with highly rated approved counterparties.

Market Risk  
The major risk for Kennox is that its operating costs are in sterling and its revenue is derived from the assets under management which are invested across the globe.

Capital Resources
Pillar 1 for Kennox is its fixed overhead requirement, and it is Kennox’s policy to retain additional capital on top of the minimum requirement.  Pillar 2 is a review of risks that are not covered in Pillar 1.  Due to the nature and operations of Kennox, the directors have decided that the capital set aside for Pillar 1 is sufficient to cover our capital reserve requirement and no additional capital is needed due to Pillar 2.

Pillar 3 Remuneration Code Disclosure

The aim of the Remuneration Code (the “Code”) is to ensure that firms have risk focused remuneration policies which promote and are consistent with effective risk management, and do not expose firms to excessive risk.
Under the Remuneration Code, we are classified as a Level Three Firm, the lowest risk category. As examples of our low category position we do not manage or trade proprietary positions. This allows us to dis-apply many of the technical requirements of the Code and proportionately apply the Code’s rules and principles establishing the Firm’s policies.
However under the FCA’s Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU), firms are required to disclose their remuneration policy and practices, as well as to aggregate quantitative disclosure for staff assessed as having a material impact on its risk profile, including senior management (“Code Staff”).

Remuneration Policies
Kennox has adopted policies in relation to the Firm’s remuneration arrangements which address potential conflicts of interest arising from such arrangements by taking into account the controls in place to guard against the Firm’s authorised persons being rewarded for taking inappropriate levels of risk.
Kennox pays set salaries and a discretionary bonus can be paid depending on the profitability of the business. Salaries are set at a level where there is a significant margin of safety surrounding the minimum capital required for the business. Kennox’s bonus policy will at all times consider the capital requirements and the long-term health of the business.
Kennox is satisfied that the policies in place are appropriate to its size, internal organization and the nature, scope and complexity of its activities.

Decision Making Process
The Firm’s Remuneration Policy is set by the directors of the Firm. The Firm has assessed its members and staff and concludes that 5 members of staff qualify as Code Staff. Each year the Firm assesses the amount of capital it considers necessary to run its business and if necessary uses some or all of the profits available to increase its capital resources.

Terms of Use

Kennox Asset Management Limited is authorised and regulated by the Financial Conduct Authority. It is important that you read this information. The distribution of the information contained in this website in certain countries may be restricted by law and persons who access it are required to inform themselves of and to comply with any such restrictions. In particular, this website is not intended for residents of the United States as we are not authorised to sell our products and services in the United States.

While we believe the information in this website to be accurate and reliable, we give no warranty of that and we are not responsible for the accuracy of any information provided by third parties.

The information in this website does not constitute, or form part of, any offer to sell or issue, or any offer to purchase or subscribe for shares, nor shall this document or any part of it or the fact of its distribution form the basis of or be relied on in connection with any contract. Interests in any investment funds managed by Kennox (“Funds”) will be offered and sold only pursuant to the prospectus or offering memorandum relating to such Funds.

An investment in the Kennox Strategic Value Fund carries a degree of risk and is not suitable for retail investors. Kennox has not taken any steps to ensure that the securities referred to in this website are suitable for any particular investor and no assurance can be given that the stated investment objectives will be achieved.

Kennox will not be liable for any loss or damage arising out of or in connection with the use of this site.

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