Vintage Asset Management Limited
MIFIDPRU 8 ANNUAL DISCLOSURE STATEMENT
For the year ended 31st March 2023
Introduction
Vintage Asset Management Limited (‘the firm’) is required by the Financial Conduct Authority (FCA) to disclose information under the Investment Firms Prudential Regime (IFPR) which came into effect on 1st January 2022 as a new regime for UK firms authorised under the Markets in Financial Instruments Directive (MiFID). The FCA implemented the regime as prudential regulation within the MIFIDPRU section of the FCA Handbook and this statement covers the firm’s requirements under MIFIDPRU 8 for the year ending 31st March 2023; this is the first year for which we have prepared such a statement (having previously provided a Pillar 3 disclosure). We shall publish it directly to the firm’s website rather than in the firm’s annual Report & Accounts.
Scope and application
Vintage Asset Management is a MIFIDPRU investment firm that is authorised and regulated by the FCA with number 489408. The firm is classified as a Small and non-interconnected entity (SNI) and we provide this disclosure on an individual firm basis.
Remuneration policy and practices
Under our designation as an SNI MIFIDPRU firm under IFPR we are required to make a disclosure of the following remuneration information regarding our remuneration policy and practices, covering both qualitative and quantitative matters.
For qualitative disclosures, we address our approach to remuneration for all staff, the objectives of any financial incentives and the procedures or governance in relation to our remuneration policies and practices. This will include, where applicable, the make-up and mandate of a remuneration committee and details of any external consultants we have engaged. The review of the key characteristics is intended to enable an understanding of the risk profile of our firm, an overview of any incentives, the different components of our remuneration, a categorisation of those components as fixed or variable and a summary of the financial and non-financial performance criteria we use to assess performance.
The board of directors form the remuneration committee and acknowledge that it is their responsibility to ensure that the firm’s remuneration and dividend policies, practices and procedures are:
– in line with the firm’s business strategy, objectives and long-term interests;
– consistent with sound and effective risk management and do not encourage excessive risk-taking;
– appropriate to attract, motivate and retain suitable staff;
– representative of the underlying performance of the business and would not reward individuals for poor performance; and
– inclusive of measures to avoid conflicts of interest.
The firm has reviewed its remuneration policies to ensure that they remain appropriate, including in line with the new Consumer duty that will apply as of end July 2023. We consider the risk profile of the firm to be moderate, given its business as a discretionary fund manager and the nature of its portfolios; we do not consider this to have changed with the growth in the platform-based proposition nor the recent acquisition of assets.
The principal component of remuneration for the firm’s full-time staff is a base salary that we believe to be broadly in line with, if probably lower than, that for those in similar firms. The firm pays into an independent pension scheme for its employees as required and it provides a number of benefits, such as healthcare and now travel insurance, which account for a small proportion of the total.
Remuneration and dividends are determined with reference to a number of factors including, but not limited to, the performance of the individual, the firm and the individual’s adherence to the Company’s risk management and compliance procedures. The firm has in place two bonus schemes. The first, for the managing director, pays a bonus equivalent to 10% of the operating profit subject to any adjustments agreed by the board; this has replaced a previous scheme that was linked to revenue. This scheme is intended to reward the individual for the overall performance of the business, which comprises the maintenance of assets under management through the elements of investment returns and client retention, as well as the potential growth in assets and the control of costs. The second scheme, for the investment team, pays a fixed amount each year or in future each quarter subject to the meeting of specific targets that include delivering satisfactory investment returns, meeting client requirements on matters such as income payments and minimising trading errors. We believe that these schemes are appropriate in their size, given that the variable component of any remuneration is a smaller proportion of the whole, and in their approach, in that they are aligned with achieving good outcomes for clients and avoiding potential conflicts of interest. We have a focus on ensuring stability in the business and we do not have in place schemes that provide an incentive to aim for an inappropriate level of growth.
The firm has an established EMI scheme for certain key individuals, which we believe serves to help with the retention of such staff.
The firm pays dividends to shareholders, which we would usually expect to be from retained earnings; these dividends will constitute a high proportion of variable earnings for the two directors who are the controlling shareholders. The firm also pays
quasi-dividends under the EMI scheme, which also constitute a variable element of remuneration. Variable remuneration which is paid in the form of bonuses and dividends is only awarded after full consideration of relevant factors, together with an assessment of any current or potential risks to the business in the context of these payments. The dividends are paid quarterly and can be paused as needed.
The remuneration committee believes that its remuneration and dividend policies, procedures and practices are aligned with the objectives of client assets under management and that the payment of variable remuneration and dividends is therefore aligned to the performance and success of the assets under management, where the Company acts as investment manager.
For quantitative disclosures, the firm’s Code staff, all of whom have been approved by the FCA under section 59 of the Financial Services and Markets Act 2000 to perform a senior management function, received aggregate remuneration of £658,071 and dividends of £253,750 during the year ended 31st March 2023.
The split between the fixed and variable remuneration for our performance year-end, which is also our financial year-end, is as follows:
Fixed remuneration (including employers’ National Insurance and workplace pension contributions): £503,733
Variable remuneration
– bonuses and quasi-dividends: £154,338
– dividends: £253,750
Total remuneration: £911,821