The Company acts in the best interests of the AIFs or the investors in the AIFs they manage when executing decisions to deal on behalf of the managed AIF in the context of the management of their portfolio.
Whenever the Company buys or sells financial instruments or other assets for which best execution is relevant, and for the purpose of the above paragraph, takes all reasonable steps to obtain the best possible result for the AIFs it manages or the investors in these AIFs, taking into account price, costs, speed, likehood of execution and settlement, size, nature or any other consideration relevant to the execution of the order. The relative importance of such factors shall be determined by reference to the following criteria:
- The objectives, investment policy and risks specific to the AIF, as indicated in the AIF rules and articles of association, prospectus or offering documents
- the characteristics of the investor including the categorization of the investor as retail or professional;
- the characteristics of the order;
- the characteristics of financial instruments that are the subject of that order
- the characteristics of investments that are subject to that order
- the characteristics of the execution venues to which that order can be directed.
The Company takes all reasonable steps to obtain the best possible result for the AIFs and their investors to the extent that it executes an order or a specific aspect of an order following specific instructions from the AIF and their investors relating to the order or the specific aspect of the order.
The above, also apply when the Company places orders to deal on behalf of the managed AIFs with other entities for execution, in the context of the management of their portfolio.
In the cases of non-listed equities and loan investments best execution presumes that the Company will make every effort for the execution of the transaction to be as cost effective as possible and within the remit of the legal and company law framework of the applicable jurisdictions.
- Execution of orders on behalf of AIFs and their investors
The Company satisfies the following conditions when carrying out AIFs and their investors orders:
- ensures that orders executed on behalf of the AIFs and their investors are promptly and accurately recorded and allocated;
- carries out otherwise comparable investors’ orders sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable, or the interests of the investors require otherwise;
- informs a retail investor about any material difficulty relevant to the proper carrying out of orders promptly upon becoming aware of the difficulty.
Where the Company is responsible for overseeing or arranging the settlement of an executed order, it shall take all reasonable steps to ensure that any investor financial instruments or investor funds received in settlement of that executed order are promptly and correctly delivered to the account of the appropriate investor.
The Company does not misuse information relating to pending investor orders, and takes all reasonable steps to prevent the misuse of such information by any of its relevant persons.
- Reporting obligations in respect of execution of subscription and redemption orders
Where the Company has carried out a subscription or, where relevant, a redemption of order from an investor, it shall promptly provide the investor, by means of a durable medium, with the essential information concerning the execution of that order or the acceptance of the subscription offer, as the case may be. The essential information shall include the following information:
- the identification of the Company;
- the identification of the investor;
- the date and time of receipt of the order;
- the date of execution;
- the identification of the AIF;
- the gross value of the order including charges for subscription or the net amount after charges for redemptions.
The Company shall supply the investor, upon request, with information about the status of the order or the acceptance of the subscription offer, or both as the case may be.
- Aggregation of Orders
The Company is not permitted to carry out an AIF order in aggregate with an order of another AIF, an investor or with an order made when investing their own funds unless the following conditions are met:
- it must be unlikely that the aggregation of orders and transactions will work overall to the disadvantage of any AIF or investor whose order is to be aggregated;
- it is disclosed to each AIF or investor whose order is to be aggregated that the effect of aggregation may work to its disadvantage in relation to a particular order;
- an order allocation policy is established and effectively implemented, providing in sufficiently precise terms for the fair allocation of aggregated orders and transactions, including how the volume and price of orders determines allocations and the treatment of partial executions.
Where the Company aggregates an order with one or more orders of other AIFs or clients and the aggregate order is partially executed in accordance with its order allocation policy.
- Order Allocation
It is not permissible for the Company to allocate trades in a way that is detrimental to the AIF or a client, where the Company aggregates transactions for its own account with one or more orders of AIFs or clients.
The Company allocates the related trades to the AIFs or clients in priority over those for own account, where the Company aggregates an order of AIFs or clients with a transaction for its own account and the aggregated order is partially executed.
Regardless of the above, if the Company is able to demonstrate to the AIF or to the client on reasonable grounds that it would not have been able to carry out the order on such advantageous terns without aggregation, or at all, it may allocate the transaction for its own account proportionally.
- Monitoring and Review
The Company monitors compliance of its executions with the order execution policy on an ongoing basis and where appropriate corrects any deficiencies.
The Company reviews its execution policy annually. Also, whenever a material change occurs that affects the Company’s ability to obtain the best possible resulted for the managed AIFs execution policy is being reviewed.
The Company at all times has to be able to demonstrate that it has executed the orders on behalf of the AIFs in accordance with this execution policy.
The Company makes available to investors in the AIFs it manages appropriate information on the best execution policy and on any material changes.
- Non-tradable securities/assets in Regulated Markets and specifically Private Equity
The Company reviews, recalculates and makes sure that it obtains the best possible execution, a correct Net Asset Valuation (NAV), clients will be accordingly notified. The Company reviews all adjustments on the NAV and ensures that they are correct and reasonable. In addition to the above the Company reviews (where applicable) the following and makes sure that they are in accordance with the mandate:
- management fees
- transactions fees
- carried interest
- hurdle rates
- key man clauses
- claw back provisions
- distribution waterfalls
- tag-along, drag along rights
- no-fault divorces
- other investment restrictions.
- Best Execution vary between asset classes
The process the Company delivers best execution varies from asset class to asset class. In this respect, different execution factors are taken into account in relation to the asset classes chosen by the AIFs under management including Private Equity, Venture Capital and Hedge Funds.