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Stewardship and Shareholder Rights Disclosure

N4 Group Limited (the “Firm”) supports the principles enshrined in the Financial Reporting Council's Stewardship Code (the “Code”) which sets out good practice for investor engagement. The FCA requires all authorised asset managers to publicly disclose either a statement of compliance with the Stewardship Code or where they do not commit, their alternative investment strategy.

The Firm operates a focused strategy which involves raising blind pools of capital to invest in small to mid-sized private companies businesses mainly in the UK and Europe. Investing in UK listed companies is not part of its strategy. As a result, whilst the Firm generally supports the objectives that underlie the Code, they have limited relevance to its strategy. If the Firm strategy changes in such a manner that the provisions of the Code become relevant, the Firm will amend this disclosure accordingly.

The Shareholder Rights Directive (the “Directive”) does not apply to the Firm as it does not invest in shares traded on EU Regulated Markets. If the Firm's investment strategy changes in such a manner that the provisions of the Directive become relevant, the Firm will amend this disclosure accordingly.

Remuneration Disclosure (Performance Period Ended 31 December 2022)

N4 Group Limited (“the Firm” ) is a MIFID investment firm authorised and regulated by the Financial Conduct Authority (“FCA”). The Firm is required to comply with the disclosure requirements under the Investment Firms Prudential Regime (“IFPR”), which is set out in the FCA Handbook MIFIDPRU 8. 

For the purpose of prudential regulations, the Firm is classified as a "non- SNI (small and non-interconnected) firm" and is subject to the basic and standard requirements.  We are required to provide a level of detail in our disclosures that is appropriate to our size and internal organisation, and to the nature, scope, and complexity of our activities.

The Remuneration disclosure of the Firm is set out below as required by MIFIDPRU 8.

The Governing Body is responsible for the Firm’s remuneration policy.

The overarching approach of the Firm is designed to encourage the alignment of the risks taken by the Firm’s staff, its clients, mandates, and the Firm itself.

The Firm distinguishes between criteria for setting fixed and variable remuneration and ensures that remuneration is clearly categorised as one or the other.  

In line with the FCA’s guidance, the Firm considers the difference between the two as follows:

  • Fixed remuneration primarily reflects a staff member’s professional experience and organisational responsibility as set out in the staff member’s job description and terms of employment. It should be pre- determined, non-discretionary and not dependent on performance. 
  • Variable remuneration is be based on performance and reflects long-term performance, as well as performance above and beyond an employee’s job description. It includes carried interest. When the Firm assesses individual performance to determine the amount of variable remuneration, it will consider both financial and non-financial criteria. As conduct is crucial to the compliance culture of the Firm, if an employee shows poor conduct, this may override their performance in financial areas. Conduct is therefore the biggest metric within non-financial considerations.

Within the Firm for employees:

  • Fixed remuneration is made up of salary.
  • Variable remuneration is made up of bonus and carried interest.

Remuneration of the partners (being LLP members) is in accordance with the following principles:

  • Fixed drawings which are generally considered fixed remuneration; and 
  • Discretionary year end profit share is usually considered variable remuneration.

The Firm assesses performance across the firm, business units and individuals considering the following criteria:

  • Financial metrics including contribution to fee income and returns to investors; and
  • Non-financial metrics including: first and foremost, conduct, the building and maintenance of positive customer relationships and outcomes; alignment with our strategy or values, for example by displaying leadership, teamwork or creativity; adhering to our compliance policies & procedures; and meeting other non-financial targets relating to environmental, social and governance factors and diversity and inclusion.

All the above factors in assessing performance are considered at the Firm, business unit and individual level as applicable. Overall, greater weight is placed on non-financial metrics when assessing performance. 

No disclosure is made of the quantum of remuneration of the Firm for the financial year ended 31 December 2022 on the grounds of privacy.