Regulatory Disclosures

Statutory Disclosure

Welwing Capital Group Limited is licensed to carry out Type 9 activity by the Hong Kong Securities and Futures Commission (CE#: BOP594), as well as registered as an Exempt Reporting Advisor with the Securities and Exchange Commission in the United States (CRD#: 306751). Welwing Capital Management (UK) LLP is authorised and regulated by the Financial Conduct Authority (FRN: 985443).

UK Regulatory Disclosures

Stewardship Code Disclosure

Under Rule 2.2.3R of the Financial Conduct Authority’s (“FCA”) Conduct of Business Sourcebook, Welwing Capital Management (UK) LLP (“Welwing Capital” or “the Firm”), to the extent it is managing investments for a professional client (as defined by the FCA), is required to disclose the nature of its commitment to the UK Financial Reporting Council’s Stewardship Code (the “Code”) or, where it does not commit to the Code, explain its considered choice based on the Firm’s investment approach. The Code is a voluntary code and sets out a number of principles relating to engagement by investors in UK-listed companies.

Welwing Capital pursues a global fixed income relative value investment strategy and as such invests across a variety of asset classes and markets globally. Exposure to UK listed issuers as part of that strategy is limited and where such exposure is taken it is not typically through investment directly into individual UK equities. Therefore, whilst Welwing Capital generally supports the objectives that underlie the Code, the nature of its investment strategy is such that its provisions are not materially relevant. The Firm has therefore chosen not to commit to the Code at this time.

SRD Disclosure

Under Rule 2.2B.5.R of the Financial Conduct Authority’s (“FCA”) Conduct of Business Sourcebook, Welwing Capital Management (UK) LLP (“Welwing Capital” or “the Firm”), is required to disclose whether it has an engagement policy in relation to the issuers of investments traded on a regulated market or comparable overseas market (the “Engagement Policy”) or, where it does not comply with such requirements, to disclose why it has chosen not to do so. Given the Firm’s investment approach it has chosen not to have an Engagement Policy for the reasons described below.

The Firm pursues a global fixed income relative value investment strategy and as such invests across a variety of asset classes and markets globally. Exposure to listed issuers on regulated or comparable markets is not a material element of that strategy and where such exposure is taken it is not typically taken on an activist investor basis. Therefore, an Engagement Policy has limited applicability to the Firm’s investment strategy given its limited ability to exercise stewardship. Whilst the Firm supports the objectives that underline the rationale for development of an Engagement Policy, the nature of its investment strategy is such that it means that it is not practical for it to formally engage with investee companies or carry out shareholder engagement activities at this stage although this remains under periodic review.

Modern Slavery Statement

Introduction

This statement is made by Welwing Capital Management (UK) LLP (“Welwing UK” or “the Firm”), pursuant to section 54 of the UK Modern Slavery Act 2015 (the “Act”) and in respect of the financial year ended 31 st December 2023.

Business and Organisational Structure

Welwing Capital Group Limited and its affiliates (collectively, “Welwing”) is a global alternative investment manager that seeks to integrate fixed income arbitrage with global macro strategies. Welwing UK is a sub-investment manager to Welwing.

Welwing UK is a limited liability partnership incorporated in England and Wales and regulated by the UK Financial Conduct Authority to carry on investment management activities.

Welwing employs a workforce comprising employees, independent contractors and consultants who perform business and non-core functions. Most of these staff carry out highly-skilled activities and therefore the risk of these individuals being subject to Modern Slavery is very low.

Supply Chain

As a financial services business we have a limited supply chain comprised mostly of professional services companies such as institutional financial firms, financial data providers and information technology service companies that employ skilled labour in developed financial markets where the risk of Modern Slavery in such supply chains is low.

Welwing also receives services for certain non-core functions (for example office cleaning, catering and building facilities services) that may pose a higher risk of Modern Slavery.

We expect all of our suppliers to adhere to all applicable laws in conducting their businesses and to operate a fair and ethical workplace for their staff. Welwing will not tolerate modern slavery or human trafficking within its supply chain and, where applicable, we have contacted suppliers to remind them of our values and ethical standards.

Awareness and Training

We have existing policies in place that are relevant to addressing Modern Slavery, including a Staff Handbook, a Whistleblowing policy and policies related to the prevention of money laundering, bribery and corruption. Staff receive periodic training on modern slavery to ensure they remain vigilant and we expect any concerns about modern slavery to be raised via our Whistleblowing policy.

MIFIDPRU 8 Disclosure

Introduction

The Financial Conduct Authority (“FCA” or “regulator”) in the Prudential sourcebook for MiFID Investment Firms in the FCA Handbook (“MIFIDPRU”) sets out the detailed prudential requirements that apply to Welwing Capital Management (UK) LLP, (“Welwing” or the “Firm”). Chapter 8 of MIFIDPRU (“MIFIDPRU 8”) sets out public disclosure rules and guidance with which the Firm must comply, further to those prudential requirements.

Welwing is classified under MIFIDPRU as a small and non-interconnected MIFIDPRU investment firm (“SNI MIFIDPRU Investment Firm”). As such, the Firm is required by MIFIDPRU 8, more specifically under 8.6, to disclose certain information regarding its remuneration policy and practices and this document is designed to satisfy those requirements.

The purpose of MIFIDPRU 8.6 disclosure is to provide the reader with an understanding of the risk profile of the firm and/or the assets it manages through summary information on (1) our approach to remuneration, (2) the objectives of financial incentives and (3) the decision-making procedures and governance surrounding the development of the remuneration policies/practices.

This document has been prepared by Welwing in accordance with the requirements of MIFIDPRU 8 and we have provided information that we consider to be appropriate to our size and internal organisation, and to the nature, scope and complexity of our activities. Unless otherwise stated, all figures are as at the Firm’s 31st December financial year-end.

Qualitative Remuneration Disclosures

Approach and Objective of Remuneration

As an SNI MIFIDPRU Investment Firm, Welwing is subject to the basic requirements of the MIFIDPRU Remuneration Code (as laid out in Chapter 19G of the Senior management arrangements, Systems and Controls sourcebook in the FCA Handbook (“SYSC”)).

Welwing’s approach to remuneration is to have a remuneration policy and process which enables us to meet the remuneration requirements and promote sound and effective risk management and not encourage risk taking which is inconsistent with the risk profile of Welwing’s clients. We also recognise that remuneration is a key component in how we attract, motivate, and retain quality staff and in how those staff sustain consistently high levels of performance, productivity, personal growth and results which meet our firm’s strategic objectives. As such, the remuneration process must also have regard to broader market components, role specific or industry wide, as well as individual and firm performance. Collectively, our remuneration policy and the financial incentives stemming from it have the objectives of:

Promoting effective risk management in the long-term interests of the Firm and its clients;
Ensuring alignment between risk and individual reward;
Supporting personal growth, positive behaviours and healthy firm culture, on a consistent basis,
Discouraging behaviours that can lead to misconduct and poor customer outcomes; and
Meeting regulatory requirements.

In line with the Firm’s core values with regard to equality, diversity and inclusion, we do not discriminate against gender or other such personal or cultural characteristics when assessing and awarding (or not awarding) remuneration.

Governance and Oversight

Following an assessment of the size, internal organisation, and nature, scope and complexity of our business, we have not appointed a Remuneration Committee. The LLP Executive Committee – which is the highest level of governance for the firm – is responsible for implementing Welwing’s remuneration policy and practices and awarding compensation. The LLP Executive Committee:

Is appropriately staffed to enable it to exercise competent and independent judgment on remuneration policies and practices and the incentives created for managing risk, capital, and liquidity across the entire business. The LLP Executive Committee is comprised of the Group COO, Group Head of Compliance, and a Senior Portfolio Manager. As a Partner and Senior Manager within the Firm, the Group Head of Compliance can ensure that any relevant compliance considerations are considered when setting individual remuneration awards.
Prepares decisions regarding remuneration, including decisions that have implications for the risk and risk management of the Firm.
Ensures that the Firm’s remuneration policy and practices consider the long-term interests of stakeholders in the Firm.
Ensures that the overall remuneration policy is consistent with the business strategy, objectives, values, and interests of the Firm and of its clients.

Welwing’s remuneration policy and practices are reviewed at least annually by the LLP Executive Committee.

Welwing Remuneration Structure

Components of Remuneration

Remuneration is a total compensation number composed of base salary (fixed compensation) and discretionary bonus (variable compensation). Given the size and nature of the firm, we believe the best approach to meeting the objectives of our remuneration policy is to assess performance throughout the year and then conduct a formal annual review of compensation for all staff. We believe this provides strong incentive for staff to focus on their contribution to the firm within an appropriate timeframe to prove consistent delivery and motivate personal and professional development in line with our firm objectives.

Fixed compensation is set competitively, commensurate with market rates bearing in mind this is a primary reflection of professional experience and organisational responsibility set at a level to attract and retain skilled staff. Fixed compensation is contractual i.e., permanent, pre-determined, nondiscretionary, non-revocable and not dependent on performance. The LLP Executive Committee has sought to set the fixed element of employee total compensation at a sufficient level to provide staff with comfortable living standards, which avoids reliance on the variable element of remuneration, whilst ensuring the Firm’s capital and liquidity position remains strong.

Variable remuneration is paid on a discretionary basis and takes into consideration the Firm’s financial performance and long-term performance of the individual in contributing to the Firm’s success. All staff members are eligible to receive variable remuneration where performance allows and payment of such an award does not weaken the financial stability of Welwing.

Summary of Financial and Non-Financial Performance Criteria

The financial and non-financial performance criteria used across the Firm in assessing variable compensation include:

Firm level Criteria

Assets under management and investment performance
Outlook and risks fo
the Firm in the future
Outlook for the market/competition for staff

Business unit criteria

As a small firm, we focus on role specific criteria for individuals which gives us better granularity on performance than setting business unit criteria

Individual staff member level criteria

Performance of the individual personally – their productivity and contribution to the business and team in line with their role and defined objectives and/or target metrics
The value of the staff member to the Firm as determined by the LLP Executive Committee, and the staff member’s contribution to its strategy and overall objectives
Adherence by the staff member to the Firm’s policies and procedures including compliance policies and risk limits
For investment management staff, formula-based remuneration tied to their individual portfolio performance

Overall, we consider that the fixed and variable components of remuneration are appropriately balanced: the fixed component represents a sufficiently high proportion of the total remuneration to enable the operation of a fully flexible policy on variable remuneration. This allows for the possibility of the Firm not paying a variable remuneration component in certain situations, such as where the Firm’s profitability performance is constrained, or where there is a risk that the Firm may not be able to meet its capital or liquidity regulatory requirements.

Quantitative Remuneration Disclosure

For the financial year 1stJanuary 2023 to 31st December 2023, the total amount of remuneration awarded to all staff, including pension, was £222,083, of which £222,083 comprised the fixed component of remuneration, and £0 comprised the variable component. For these purposes, ‘staff’ is defined broadly, and includes employees of the Firm and the Partners, but where relevant employees of other entities in the group.

Welwing Capital Management (UK) LLP

1.1 The UK Terms of Use stated below is issued by Welwing Capital Management (UK) LLP (“WCUK” or the “Company”, “we”, or “us”) which is authorised and regulated by the Financial Conduct Authority of the United Kingdom (the “FCA”) (Reference Number: 985443). You can gain access to the FCA’s rules and guidance notes from the following link: http://www.fca.org.uk.

1.2 WCUK is a limited liability partnership registered in England (Company Number: OC439846), with its principal business address at 3 St James Square, London, SW1Y 4JU and its registered office at 4th Floor, Phoenix House, 1 Station Hill, Reading, Berkshire, RG1 1NB, United Kingdom.

1.3 General enquiries about this Website should be sent to info@welwingcapital.com.
Enquiries about investments in any WCUK managed product should be sent to ir@welwingcapital.com.

These Terms

2.1 These Terms set out the terms on which you may use this Website, and apply to all pages, even where they are not individually disclaimed. These Terms also incorporate our Cookies Policy and Privacy Notice (please refer to section 3 below) and all other policies and procedures that we may publish from time to time on this Website. Each of these is incorporated by reference and may be updated from time to time without notice.

2.2 By using this Website, you confirm that you accept these Terms, and that you will comply with them. If you do not agree to these Terms, you are not permitted use this Website.

Cookies and Privacy

3.1 This Website uses cookies. By continuing to use this Website you are giving consent to cookies being used. For information on cookies and how you can disable them, please visit our Cookies Policy.

3.2 For information on how WCUK uses certain other types of personal data, please refer to our Privacy Notice.

The Financial Reporting Council’s Stewardship Code

4.1 Under the rules of the FCA Handbook, WCUK is required to include on this Website a disclosure about the nature of its commitment to the UK Financial Reporting Council’s Stewardship Code (the “Stewardship Code”) or, where it does not commit to the Stewardship Code, its alternative investment strategy.

4.2 WCUK’s Stewardship Code disclosure statement is available on this Website.

Intended Audience of the Website

5.1 This Website is directed only at persons who are professional investors (for the purposes of the Alternative Investment Fund Managers Directive (2011/61/EU) (“AIFMD”)) (“Professional Investors”); professional clients or eligible counterparties (for the purposes of the Markets in Financial Instruments Directive (Directive 2004/39/EC) (“MiFID”)) (“Professional Clients” or “Eligible Counterparties”); or as otherwise defined under applicable local regulations and at whom this site and the information on it may lawfully be directed in any relevant jurisdiction. Please contact us at info@welwingcapital.com if you require any further information on your status.

5.2 By accepting these Terms, you hereby certify that you are a Professional Investor, a Professional Client or an Eligible Counterparty.

5.3 It is your responsibility to inform yourself, and to comply with, all relevant legal or regulatory requirements of any jurisdiction of which you are a citizen, in which you are resident, or in which you are accessing this Website which may affect your eligibility to access the Website or subscribe to any investment services that WCUK offers. In particular, it may be illegal to view and/or download the information contained on this Website in certain countries and we disclaim all responsibility if you access or download any information from this Website in breach of any law or regulation of the country in which you are a citizen, or in which you are resident or domiciled.

5.4 The services, funds, and products described on this Website are not available in all countries or to all investors. As such, this Website and the information on it are not addressed to any person resident in the territory or country or jurisdiction where such distribution would be contrary to local law or regulation. Some funds are not available, and offering materials relating to them will not be distributed, to persons resident in any country where such distribution would be contrary to local law or regulation.

5.5 Any person subscribing for an investment, product, or service referred to on this Website must be able to bear the risks involved with such investment, product, or service, and must meet the applicable suitability requirements relating to such investment, product or service. Some or all investment programs offered by WCUK may not be suitable for certain investors.

5.6 If you are not clear about the meaning of anything on this Website or other information provided by WCUK, you should seek professional advice.

Right to Deny Access

6.1 WCUK reserves the right to deny you access to this Website. We may immediately suspend or terminate your access to this Website or disable any username or password (whether chosen by you or allocated to you by us), at any time, and at our sole discretion.

6.2 We may have reason to update the Website from time to time, though we are not under any obligation to do so. We may update or remove information from the Website without notice. From time to time, we may restrict or suspend access to some parts of the Website, or the entire Website, for example for maintenance purposes. As such, access to the Website is not necessarily permanent or guaranteed.

Your Responsibilities

7.1 When you use this Website, you agree that you will not:

(A) use the Website for any unlawful, improper or illegal purpose or activity, nor will you use this Website to damage our name or reputation, or that of any third party;

(B) misuse the Website by knowingly introducing viruses, Trojan horses, worms, logic bombs or other material which is malicious or technologically harmful. You must not try to gain unauthorised access to the Website, the server on which the Website is stored, or any server, computer or databases connected to our website. You must not attack the Website using a denial-of-service attack or a distributed denial-of service attack;

(C) violate our, or any third party’s copyright, trademark, proprietary or other intellectual property rights, as outlined further below;

(D) access, copy, or otherwise use the Website, except as authorised by these Terms or as otherwise authorised in writing by WCUK in its sole and absolute discretion; and/or

(E) impersonate any person or entity, use a fictitious name, or misrepresent your affiliation with a person or entity.

Use of Website Content

8.1 In the United Kingdom, the issue and communication of this Website has been approved by WCUK. If you are in the United Kingdom or in any EEA member state, you should note that this Website may contain information or documents which constitute a financial promotion for the purposes of the Financial Services and Markets Act 2000 and the FCA Rules. This Website is issued only to and/or is directed only at persons who are Professional Clients, Eligible Counterparties or Professional Investors.

8.2 The information in this Website does not constitute an offer of, or an invitation to apply for or purchase any securities, investments, products or services. WCUK does not provide investment advice to, nor receive and transmit orders from, investors in any funds, nor do we carry on any other activities with or for such investors that constitute ‘MiFID or equivalent third country business’ for the purposes of the FCA Rules.

8.3 The information and opinions on this Website do not constitute an investment recommendation, or other information recommending or suggesting an investment strategy.

8.4 The information and opinions contained on this Website have been compiled, or arrived at, by us from sources believed by us to be reliable as at the date of publication, however it is subject to change with no notice. The information and opinions do not in any way constitute investment, legal, tax or other advice and are for background purposes only.

8.5 This Website is not intended to provide a sufficient basis on which to make any investment decision and you should not solely rely on it in evaluating the merits of investing in any investments, products or services referred to on this Website. Any decision to purchase securities or interests with respect to any funds must only be made having thoroughly read the relevant prospectus or offering memorandum for the relevant fund, including any supplements, which must be received and reviewed prior to any investment decision and which may contain information which is different from the information and opinions contained on this Website.

8.6 There is no way to invest through the Website. Enquiries about investments in any WCUK managed product should be sent to ir@welwingcapital.com

Accuracy of Information

9.1 We have taken reasonable care to ensure that the information on this Website is accurate, current, fit for its intended purpose and compliant with applicable law and regulation. However, errors and omissions may occur due to circumstances beyond our control, and neither WCUK nor its affiliates offer any warranties or representations regarding the accuracy, validity or completeness of the information on this Website.

9.2 As such, WCUK and its affiliates expressly exclude liability and responsibility arising from your reliance on the information and other materials on the Website, or the reliance of anyone with whom you share the materials.

9.3 You must conduct your own due diligence and investigations rather than relying on any information on this Website. Any person who acts on, or changes their investment position in reliance on, the information contained on this Website does so entirely at their own risk.

Our Liability

10.1 Further to paragraph 9, neither we nor our affiliates accept any responsibility for any reliance which is placed by any visitor to this Website, or by anyone who may be informed of any of its contents, on any information or opinions which are expressed herein and, to the extent permitted by law, expressly exclude all conditions, warranties, representations, undertakings and other terms which might otherwise be implied by statute, common law or in equity.

10.2 WCUK and its affiliates shall have no liability for any data transmission errors such as data loss or damage or alteration of any kind, including, but not limited to, any direct, indirect or consequential damage, arising out of the use of our Website or other services.

10.3 Further, you agree that if you transmit confidential or proprietary information through the Website, you do so entirely at your own risk.

Your Indemnity

You agree to indemnify, defend, and hold harmless WCUK, its affiliates and our respective officers, partners, employees, and agents from and against all claims, liabilities, damages, losses, or expenses, including legal fees and costs, arising out of or in any way connected with your breach of the Terms and/or access to or use of this Website.

Third Party Websites

12.1 At times this Website may contain links to or from other websites over which WCUK has no control. These links are solely for your convenience or information, and may be subject to their own terms and conditions. We cannot verify the accuracy of any information contained in third party websites, nor does the inclusion of these links represent an endorsement or a recommendation of the third-party websites. WCUK accepts no liability for the content of any website to which the Websites link.

Investment Performance

You should note that investments do involve risk and past performance is not a guide to future performance. The value of your investments and the income from them may go down as well as up, and returns are not guaranteed. Tax reliefs may change as per the UK budget from time to time, as they have done previously, and rates of exchange may cause the value of investments to go up or down.

Calls Recorded

For the protection of all parties, telephone calls to WCUK or its affiliates may be recorded.

Intellectual Property

15.1 We are the owner of all intellectual property rights in the Website, and the material published on it, including, among other things, all trademarks, logos, service marks and service names, whether they are registered or not. These works are protected by, among other things, copyright laws and treaties around the world. We reserve all such rights.

15.2 You may use, download, and reproduce in hard copy, the Website and any materials located on it for your own reference only. You must not otherwise copy, reproduce, republish, disassemble, decompile, reverse engineer, download, post, broadcast, transmit, make available to the public, or otherwise use Website content in any way without licence from us. You also agree not to adapt, alter or create a derivative work from any Website content.

15.3 Nothing on this Website should be construed as granting any licence or right in relation to any of our trademarks, or any third party.

Changes to Terms

We may revise these Terms from time to time by updating this page. The revised Terms will take effect when they are posted. You are expected to check this page from time to time and to take notice of any changes we may have made, as by using this Website you acknowledge that you have accepted any such amendments.

Severability

In the event that any provision of these Terms is determined to be unlawful, void or unenforceable, such provision shall nonetheless be enforceable to the fullest extent permitted by applicable law, and the unenforceable portion shall be deemed to be severed from these Terms (such determination shall not affect the validity and enforceability of any other remaining provisions). When used in these Terms the words ‘includes’, and ‘including’ shall be deemed to be followed by the phrase ‘without limitation’.

Material Interests

We and our partners, officers and/or employees may have holdings in the investment funds referred to on this Website and may otherwise be interested in transactions that you effect in those funds.

Term and Termination

19.1 These Terms will apply to you as soon as you access the Website and will continue to have effect until they are terminated or if you are no longer interacting with us.

19.2 We may terminate your right to use the functions of our Website at any time, including if you violate or breach these Terms or if allowing you to access and use the Website or its related functions would violate any applicable local, state, provincial, national and other laws, rules and regulations, or would expose WCUK to any legal liability whatsoever.

19.3 If these Terms are terminated or you are no longer interacting with WCUK, these Terms may no longer apply. However, any provisions of the Terms that by their nature should continue to apply after termination of these Terms will do so. This includes, without limitation, all limitations on liability, choices of law and judicial forum and intellectual property protections and licences.

No Waiver

No waiver by us shall be construed as a waiver of any preceding or succeeding breach of any provision.

Third parties

We shall have the benefit of the rights conferred on us by these Terms but otherwise no person who is not a party to these Terms may enforce its terms under the Contracts (Rights of Third Parties) Act 1999.

Entire agreement

These Terms (incorporating our Cookies and Privacy Notice) and our Disclaimer shall form the entire agreement between you and us in relation to your use of this Website.

Governing Law

These Terms and any non-contractual obligations arising from or connected with them shall be governed by and shall be construed in accordance with English law. English courts will have exclusive jurisdiction over any dispute arising from, or related to, use on this Website (whether arising out of or in connection with contractual or non-contractual obligations) (‘proceedings’) and it is a condition of using this Website that you waive any objection to proceedings in such courts on the grounds of venue or that proceedings have been brought in an inconvenient forum, although we retain the right to bring proceedings against you for breach of these Terms in your country of residence or any other relevant country.