The UK Stewardship Code (the “Code”)
This statement explains the approach of Njord Partners LLP (“Njord”) to the Code, and is given in accordance with COBS 2.2.3 R of the FCA Handbook. The Code is not compulsory but instead sets out behaviour which has been accepted by the industry as good practice. Where investors do not commit to the Code, they must set out their alternative investment strategy.
Background to Njord
Njord is an independent investment advisory firm, which is the alternative investment manager of Njord Partners SMA Seal LP and the investment adviser in respect of Njord Partners Special Situations Fund II SLP (SCSp) (the “Njord Funds”). Investors in the Njord Funds consist predominantly of large institutional investors. The Njord Funds invest in debt, equity and loan securities issued by European companies which are either in financial distress or other special situations. The Njord Funds do not regularly hold large equity positions in UK listed companies and as a result, Njord has chosen not to commit to the Code.
The Njord Funds invest in loans, debt and equity securities and other obligations of companies that are in financial distress and other special situations. The Njord Funds do not make investments in listed companies in anticipation of hostile takeovers. Investments will primarily be made in companies which are situated in Europe.
Where possible, and depending on the type of investment, Njord may on occasion seek representation on the board of directors or similar body. The level of involvement and monitoring from Njord will also depend on whether the investment in question has been made with a view to restructuring the company in question or some other sort of special situation. Njord may meet with directors of investee companies and where relevant other co-investors and shareholders in relation to investee companies.
Njord’s investment process ensures that senior members of Njord are responsible for specific investments in investee companies and take a lead on any dialogue with that investee company.
Njord takes an active approach to protecting the value of investment positions held by the Njord Funds. This may require Njord to engage with the management of an investee company on a specific issue, request a general meeting of the investee company or a realisation of some or all of the investments held by the Njord Funds, where appropriate. Where the Njord Funds have the right to vote shares held in investee companies, Njord will recommend that those shares are voted in accordance with what it considers to be the best interests of the Njord Funds. This will not necessarily be in support of the board of the investee company. In order to ensure that it recommends actions in the best interests of the Njord Funds, Njord will consider stewardship issues on a case by case basis in light of the relevant facts.
Njord only manages/advises the Njord Funds and does not advise, manage or operate any other investment funds or products. It is an independently owned partnership. The owners of Njord are also co-investors in the Njord Funds and are economically aligned with third party investors. Conflicts of interest between Njord and the Njord Funds relating to investee companies are therefore likely to be rare. Any conflicts that do arise will be dealt with in accordance with Njord’s conflicts of interest policy and in accordance with the constitutional documents governing the terms of the Njord Funds.
Njord contributes to the annual and quarterly reports to the investors in the Njord Funds with updates and descriptions on matters affecting investee companies, subject to applicable confidentiality obligations.