Vintage Asset Management Limited
MIFIDPRU 8 ANNUAL DISCLOSURE STATEMENT
For the year ended 31st March 2024
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 for UK firms authorised under the Markets in Financial Instruments Directive (MiFID). The FCA has 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 2024. 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, while we keep under review the wider considerations of the Vintage group of companies.
Remuneration policy and practices
We are required, under our designation as an SNI MIFIDPRU firm under IFPR, 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 the governance in relation to our remuneration policies and practices. This will include, as applicable, the make-up and mandate of a remuneration committee and the details of any external consultants we have engaged. The review is intended to enable a clear 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 not expected to encourage excessive risk-taking;
– appropriate to attract, motivate and retain suitable staff;
– representative of the underlying performance of the business and not expected to reward individuals for poor performance; and
– inclusive of measures to avoid potential 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 has applied as of 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, with the acquisition of business assets in 2023 and with the recent investment into the company in April 2024.
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 still 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 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 had in place two bonus schemes. The first, for the managing director, paid 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 and instead has been intended to reward the individual for the overall performance of the business, including the potential growth in assets and the control of costs. The second scheme, for the investment team, pays a fixed amount each year 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 have been 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 first scheme will end with a final payment expected in July 2024 as the individual will move to a reduced role. The firm previously had an EMI scheme for certain key individuals, which came to an end with the investment into the business. Two of those individuals now hold shares in the company which we believe should help with the retention of such staff.
The firm has also paid dividends to shareholders, which we expected to be from retained earnings, and these dividends constituted a high proportion of variable earnings for the two directors who were the controlling shareholders. In the year to March 2024 we paid an initial dividend relating to the first quarter of the year and then made available directors’ loans, which have since been repaid, and we do not expect to pay dividends in the current financial year or in future. The firm also paid quasi-dividends under the EMI scheme, which constituted a variable element of remuneration; these quasi-dividends stopped in the financial year while there was a completion bonus relating to retained profits in April 2024. The firm will award variable remuneration in the form of bonuses and dividends on consideration of the relevant factors, together with an assessment of any current or potential risks to the business in the context of these payments.
The remuneration committee believes that the policies, procedures and practices relating to remuneration and dividends have been aligned with the objectives of the business and the avoidance of excessive risk, as well as the performance and success of the assets under management.
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 £660,657 and dividends of £72,500 during the year ended 31st March 2024.
The split between the fixed and variable remuneration for our performance year-end, which is the same as our financial year-end, is as follows:
Fixed remuneration
(including employers’ National Insurance and workplace pension contributions): £429,542
Variable remuneration
– bonuses and quasi-dividends: £231,115
– dividends: £72,500
Total remuneration: £709,254