Gravis Capital Management Ltd – Remuneration Policy

GRAVIS CAPITAL MANAGEMENT LTD

Remuneration Policy

Overview

GCM is a collective portfolio management investment firm and is therefore subject to the requirements of both the AIFM Remuneration Code[1] and the MIFIDPRU Remuneration Code[2].

Where different remuneration requirements apply, a firm must comply with the most stringent of the relevant provisions. Due to the size of the MIFID business, limited MIFIDPRU remuneration code rules apply and, as a result, GCM must comply with the AIFM remuneration code requirements. Taking that into account, GCM has established a Remuneration Policy which it considers:

• is consistent with and promotes sound and effective risk management;
• does not encourage excessive risk taking;
• includes measures to avoid conflicts of interest; and

is in line with GCM’ business strategy objectives, values and long term interests.

GCM is satisfied that the Remuneration Policy in place is appropriate to its size, internal organisation and the nature, scope and complexity of its activities.

Scope

This Remuneration Policy applies to all employees of GCM and will apply unless and until amended. The Board of Directors of GCM is responsible for setting the Remuneration Policy which is subject to annual review to ensure that it complies with both the AIFM and MIFIDPRU Remuneration Codes.

Remuneration Code Staff

AIFM Remuneration Code Staff comprise those categories of staff whose professional activities have a material impact on the risk profiles of the AIFM or of the AIFs the AIFM manages. According to SYSC 19B.1.3R, this includes senior management, risk takers, control functions and any employees receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers. All AIFM Remuneration Code Staff are informed that they fall into this category and a full list is available on request.

Remuneration Principles

The structure of remuneration for employees comprises a combination of fixed and variable pay, made up of salary and an annual discretionary cash bonus or share of profits. The Board considers that a balanced mix of fixed and variable remuneration supports the business strategy of GCM and its business activities whilst complying with both the AIFM and MIFIDPRU Remuneration Codes.

General Remuneration Policy and Practices

The Board is responsible for setting the remuneration policy for GCM.

GCM pays its staff at a level sufficient to attract and retain suitably qualified and experienced staff. Remuneration is structured as a fixed annual salary in line with industry scales and an annual discretionary bonus. The level of remuneration reflects the market value of the role performed as well as the skills, experience and performance of the particular individual. The variable element is fully flexible. Bonus awards are dependent on the overall performance of the firm and could be zero.

Application of Proportionality

In certain cases, based on size, internal organisation, scope and complexity of activities, some of the AIFM remuneration provisions can be disapplied if it is proportionate to do so[3]. Considerations of proportionality may result in the disapplication of the following provisions (collectively referred to as the pay-out process rules):

deferral of between 40% and 60% of variable remuneration for three to five years;

payment of at least 50% of variable remuneration other than in cash;

performance adjustment; and

• retention of non-cash instruments for a period following ex post risk adjustments.

FCA has provided guidance on the application of proportionality to remuneration policies of AIFMs[4]. GCM has taken this guidance into account in the analysis of its activities, size and structure and as a result has concluded that it is appropriate to dis-apply the Pay-out Process Rules. GCM has not established a separate remuneration committee on the basis it does not consider the firm to be significant in terms of the size of the AIFs it manages, its internal organisation and the nature, scope and complexity of its activities.

Gravis Capital Management Ltd

May 2023

[1] The remuneration code set out in SYSC 19B of the FCA handbook of rules and guidance

[2] The remuneration code set out in SYSC 19G of the FCA handbook of rules and guidance

[3] European Securities and Markets Authority’s (“ESMA”) “Guidelines on sound remuneration policies under the AIFMD” allow for the disapplication of certain provisions in the AIFM Remuneration Code

[4] FG14/2 General guidance on the AIFM Remuneration Code