Apera Asset Management LLP (the “Firm”)
The Firm is authorised and regulated by the Financial Conduct Authority (the “FCA”). The Firm is an investment advisor and portfolio manager. The Firm is categorised as a “BIPRU firm” by the FCA for capital purposes. The Firm reports on a solo basis. The Firm’s Pillar 3 disclosure fulfils the Firm’s obligation to disclose to market participants’ key information on a firm’s capital, risk exposures and risk assessment processes.
We are permitted to omit required disclosures if we believe that the information is immaterial i.e. where that omission would be unlikely to change or influence the decision of a reader relying on that information. In addition, we may omit required disclosures where we believe that the information is regarded as proprietary or confidential. Proprietary information is that which, if it were shared, would undermine our competitive position. Information is considered to be confidential where there are obligations binding us to confidentiality with our customers, suppliers and counterparties.
We have made no such omissions.
The Firm’s Senior Management determine its business strategy and the level of risk acceptable to the Firm. In conjunction with the Head of Risk, Robert Shaw, they have designed and implemented a risk management framework that recognises the risks that the business faces and how those risks may be monitored and mitigated and assess on an ongoing basis. The Firm has in place controls and procedures necessary to manage those risks.
The Firm considers the following risks to the business:
Market Risk – the Firm does not operate a trading book and therefore the Firm’s market risk relates to fluctuations in foreign exchange;
Credit Risk – this relates to the extent the Firm may suffer a financial loss due to failure of one of the Firm’s counterparties, the only significant credit risk for the Firm is failure of the clients to pay fees due;
Operational Risk – this is defined by the FCA as ‘the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events, including legal risk’; and
Business Risk – the Firm considers this to be any risk arising from changes in the Firm’s business and includes risks to earnings posed by falling or volatile income, risks relating to the Firm’s business strategy and model and risks arising from the Firm’s remuneration policy.
The Firm is a Limited Liability Partnership. Its capital comprises members’ capital and audited reserves.
As at the date of this disclosure the Firm’s regulatory capital position is:
This table assumes that all regulatory capital falls into Tier 1 capital and there is no ‘hybrid capital’.
The Firm is subject to quantitative rules-based capital adequacy calculations which set out the minimum capital requirements for the Firm. This is called the Pillar 1 capital requirement.
Pillar 1 capital is the higher of:
1. the base capital requirement of €50,000;
2. the sum of market and credit risk requirements; and
3. the Fixed Overhead Requirement (“FOR”).
It is the Firm’s experience that its Pillar 1 capital requirement normally consists of the FOR.
Pillar 2 capital is calculated by the Firm as representing any additional capital to be maintained against any risks not adequately covered under the requirement in Pillar 1 as part of its Internal Capital Adequacy Assessment Process (“ICAAP”).
The Firm’s ICAAP assesses the adequacy of its internal capital to support current and future activities. This process includes an assessment of the specific risks to the Firm, the internal controls in place to mitigate those risks and an assessment of whether additional capital mitigates those risks. The Firm also considers a wind-down scenario to assess the capital required to cease regulated activities.
Having performed the ICAAP, the Firm has concluded that no additional capital is required in excess of its Pillar 1 capital requirement.
The Firm’s ICAAP is formally reviewed by the Senior Management annually, but is reviewed and revised more frequently should there be any material changes to the Firm’s business or risk profile.
Given the nature and size of our business, remuneration for all employees is set by the Senior Management of the Firm. The Firm formally reviews the performance of all employees and based thereon determines each employees overall level of remuneration and the split of that between base salary, bonus, etc. in compliance with the FCA Rules on remuneration.
The Firm is subject to the BIPRU Remuneration Code (“the Code”), has applied proportionality and, pursuant to this application and where relevant, has disapplied various provisions of the Code.