T Bailey

Stewardship Code

T. Bailey Asset Management Ltd
T. Bailey Fund Managers Ltd
Statement of Compliance with the UK Stewardship Code

Information for Institutional Investors

Our Approach

This document sets out the approach taken by T. Bailey Asset Management Limited (“TBAM”) and T. Bailey Fund Managers Limited (“TBFM”), (together “T. Bailey”) in complying with the Financial Reporting Council’s UK Stewardship Code for Institutional Investors. The Stewardship Code (“the Code”) aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. The Code requires firms to publish a statement on how they comply with the seven principles listed in the Code.

T. Bailey manages its own range of collective investment schemes (“the T. Bailey Funds”). In addition TBFM act as Authorised Corporate Director (“ACD”) for various other collective investment schemes where the Investment Management function is formally outsourced to external Investment Managers (“the ACD Funds”).

Principle 1: Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities

As T. Bailey’s preferred investment strategy is investing in other collective investment schemes (i.e. our funds operate on a fund of funds basis) rather than investing directly in shares, bonds or other securities, the stewardship function of engaging with and monitoring of the underlying investee companies is effectively delegated to the managers of the collective investment schemes which the T. Bailey Funds invest in.

Where from time to time investment is made directly in shares T. Bailey monitors resolutions and votes in an objective and informed manner using a third party proxy voting agent. Votes would always be made based on what is felt to be in the best interests of the investors in the T. Bailey Funds. It should be noted that compliance with the Code does not constitute an invitation to manage the affairs of investee companies or preclude a decision to sell a holding, where this is considered in the best interests of end investors.

For the ACD Funds, the responsibility for monitoring resolutions and votes is delegated to the external Investment Manager although the ACD Funds also mainly operate on a fund of funds basis. Each external Investment Manager is responsible for its compliance with the code.

Principle 2: Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed

T. Bailey’s duty is to act in the interests of the investors in the T. Bailey Funds. A copy of our conflicts of interest policy is available on request. For the ACD Funds, the external Investment Managers each maintain their own conflicts of interest policy.

Principle 3: Institutional investors should monitor their investee companies

As per the explanation in Principle 1 above, as the T. Bailey Funds operate on a fund of funds basis, this function is effectively delegated to the managers of the collective investment schemes which the T. Bailey Funds invest in. However, as part of the investment process we conduct fundamental analysis on the investment process which the collective investment scheme managers have in place. As well as considering a collective investment scheme manager’s performance, we also look in detail at their investment process and would expect them to comply with the Code. This would involve them meeting company management, reviewing annual reports and voting at meetings. Where from time to time investment is made directly in shares, T. Bailey will monitor the investee companies by reviewing annual reports, monitoring resolutions and votes and engaging with company management if necessary.

For the ACD Funds which are invested directly in shares, the responsibility for monitoring investee companies is delegated to the external Investment Manager.

Principle 4: Institutional investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value

Where from time to time investment is made directly in shares, T. Bailey would intervene to protect the value of investments held in the T. Bailey Funds where necessary. Escalation may take the form of voting at company meetings, writing to companies, confidential discussions with the company board or collaborating with other shareholders. Selling a holding may be deemed to be the most effective response.

For the ACD Funds which are invested directly in shares, the responsibility for escalating activities is delegated to the external Investment Manager. In our role as ACD we would be prepared to assist providing this was in line with our conflicts of interest policy (i.e. such action would not have a negative impact on investors in the T. Bailey Funds).

Principle 5: Institutional investors should be willing to act collectively with other investors where appropriate

T. Bailey will be willing to collaborate with other shareholders if it is felt that this would be appropriate.

For the ACD funds which are invested directly in shares, the responsibility for acting collectively with other investors is delegated to the external Investment Manager. In our role as ACD we would be prepared to assist providing this was in line with our conflicts of interest policy (i.e. such action would not have a negative impact on investors in the T. Bailey Funds).

Principle 6: Institutional investors should have a clear policy on voting and disclosure of voting activity

T. Bailey uses the services of a third party proxy voting agent (ISS Proxy Exchange). As T. Bailey’s preferred investment strategy is investing in other collective investments schemes (i.e. our funds operate on a fund of funds basis) rather than investing directly in shares, bonds or other securities, no votes have been cast in the previous 12 months at the time of writing. This policy will be reviewed at least annually and details of our voting history will be posted publicly where necessary.

For the ACD funds which are invested directly in shares, the responsibility for voting and disclosure of voting activity is delegated to the external Investment Manager.

Principle 7: Institutional investors should report periodically on their stewardship and voting activities

T. Bailey undertakes to review and report on voting records at least annually. T. Bailey has not sought an independent audit opinion on its engagement and voting processes.

For further information please contact:

Richard Taylor
Compliance Officer
T. Bailey Asset Management Limited
64 St. James’s Street
Nottingham
NG1 6FJ

Tel: 0115 988 8210
Email: richard.taylor@tbailey.co.uk

Version 1.1 – 24 February 2011