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MIFIDPRU 8 DISCLOSURES

November 2024 – Oxford Capital Partners LLP

 

Introduction

The Financial Conduct Authority (“FCA” or “regulator”) in its Prudential sourcebook for MiFID Investment Firms (“MIFIDPRU”) sets out the detailed prudential requirements that apply to Oxford Capital Partners LLP (OCP or the ‘Firm’). In particular, Chapter 8 of MIFIDPRU (“MIFIDPRU 8” or the “public disclosures requirements”) sets out public disclosure obligations with which the Firm must comply, further to those prudential obligations.

 
OCP is classified under MIFIDPRU as a small and non-interconnected investment firm (“SNI MIFIDPRU investment firm”) and is regulated by the FCA under firm reference number 585981. OCP is a small authorised UK Alternative Investment Fund Manager (sub-threshold) and is part of a group as it is a subsidiary of the unregulated holding company, OCP Holdings Limited (“Holdings”). As such, MIFIDPRU 8 requires OCP to disclose information regarding the Firm’s remuneration policy and practices.

The purpose of these disclosures is to give stakeholders and market participants an insight into the Firm’s culture and to assist stakeholders in making more informed decisions about their relationship with the Firm.


This document has been prepared by OCP in accordance with the requirements of MIFPRU 8 and is verified by Board. Unless otherwise stated, all figures are as of the 30 June 2024 financial year-end.

Remuneration Policy and Practices

Overview

As an SNI MIFIDPRU investment firm, OCP is subject to the basic requirements of the MIFIDPRU Remuneration code.  The purpose of the requirements on remuneration is to:

  • Promote effective risk management in the long-term interests of the Firm and its clients.
  • Ensure alignment between risk and individual reward.
  • Support positive behaviours and healthy firm cultures; and
  • Discourage behaviours that can lead to misconduct and poor customer outcomes.

 

The objective of OCP’s remuneration policies and practices is to establish, implement and maintain a culture that is consistent with, and promotes sound and effective risk management and does not encourage risk-taking which is inconsistent with the risk profile of the Firm and the services that it provides to its clients. 

In addition, OCP recognises that remuneration is a key component in how the Firm attracts, motivates and retains quality staff and sustains consistently high levels of performance, productivity and results.  As such, the Firm’s remuneration philosophy is also grounded in the belief that its people are the most important asset and greatest competitive advantage.

OCP is committed to excellence, teamwork, ethical behaviour and the pursuit of exceptional outcomes for its clients. From a remuneration perspective, this means that performance is determined through the assessment of various factors that relate to these values, and by making considered and informed decisions that reward effort, attitude and results. 

 

Characteristics of the remuneration policy and practices

Remuneration at OCP is made up of fixed and variable remuneration components.  The fixed component is set in line with market competitiveness at a level to attract and retain skilled staff.  The variable component is the bonus pool which is determined by the level of OCP’s performance and staff objectives, this includes the allocation to staff of carried interest earned on exits.  The amount payable to staff is determined via their contribution to OCP’s performance over the relevant period and on achieving their individual performance objectives.    

Governance and Oversight

OCP has a separate Remuneration Committee.  The responsibility for setting and overseeing the implementation of OCP’s remuneration policy and practices rests with the Remuneration Committee. To fulfill its responsibilities, the Committee; 

  • Can exercise competent and independent judgement on remuneration policies and procedures.
  • Prepares decisions regarding remuneration, including decisions that have implications for the risk and risk management of the Firm.
  • Ensures that the remuneration policy and practices take into account the public interest and the long-term interests of shareholders, investors and other stakeholders in the Firm; and
  • Ensures that the overall remuneration policy is consistent with the business strategy, objectives, values and interests of the Firm and of its clients.

 

OCP’s remuneration policy and practices are reviewed annually by the Committee and the Board of Holdings

 

Quantitative Remuneration Disclosures

For the financial year 30 June 2024, the total amount of remuneration awarded to all staff was £1,264,350 of which £1,061,139 comprised the fixed component of remuneration and £203,211 comprised the variable component.  For these purposes, ‘staff’ is defined broadly, and includes, for example, employees of the Firm itself, Partners, and any other relevant associated staff member.

Estimated reading time: 2 min

 

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  1. You could lose all the money you invest
    1. If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
  2. You are unlikely to be protected if something goes wrong
    1. Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
    2. Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
  3. You won’t get your money back quickly
    1. Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.
    2. The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
    3. If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.
  4. Don’t put all your eggs in one basket
    1. Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
    2. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest
  5. The value of your investment can be reduced
    1. The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
    2. These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

 

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.