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MIFIDPRU 8 Disclosure

31 March 2024

1. Introduction

1.1. Purpose and Scope

This document presents the FCA Disclosure Requirements (previously referred to as the ‘Pillar 3 Disclosure’) for Bayforest Capital Limited (“the firm”). The Firm is a UK limited company, authorised and regulated by the Financial Conduct Authority (“FCA”) as an alternative investment fund manager (“AIFM”) and collective portfolio investment management firm (“CPMI”). The Firm operates as a stand-alone entity in the UK and is not part of a consolidated group.

From 1st January 2022, the Firm has been regulated under the FCA’s Investment Firm Prudential Regime (“IFPR”) as a small and non-interconnected (“SNI”) MIFIDPRU investment firm.

The purpose of these disclosures is to assist stakeholders and market participants in making more informed decisions about their relationship with the firm.

As an SNI MIFIDPRU investment firm, the Firm is not required to disclose any information in relation to the below areas:

  • Risk management objectives and practices
  • Own funds
  • Own funds requirements

These disclosures have been prepared by the Firm in accordance with the requirements of MIFIDPRU 8. Unless otherwise stated, all figures are as at the firm’s 31 March 2024 financial year end.

2. Disclosure

The disclosures have not been audited and do not form part of the firm’s annual audited financial statements. However, they are subject to internal review and are approved by the firm’s COO and CEO, who are both members of the Risk Committee and the Board.

The disclosures are prepared on an annual basis solely for the purposes of complying with the FCA rules in MIFIDIPRU 8 for SNI investment firms. The firm may consider it appropriate to publish updated disclosures more frequently should a significant change in the business or operating environment require this.

3. Remuneration

3.1. Policy and Practices

As an SNI MIFIDPRU investment firm, the Firm is subject to the ‘basic’ requirements of the MIFIDPRU Remuneration code set out in SYSC 19G of the FCA’s Handbook. The Firm is also classified as an AIFM and, as such, is also subject to the AIFM Remuneration Code (SYSC 19B). The Firm maintains a Remuneration Policy and practices that are appropriate to the nature, scale and complexity of the risks inherent in its business model and activities. The purpose of the Remuneration Policy is to:

  • Promote effective risk management in the long-term interests of the firm and its clients and discourage risk taking which is inconsistent with the risk profile of its clients.
  • Ensure remuneration is consistent with the firm’s business strategy, objectives and values.
  • Promote good individual conduct and firm culture.

At the same time, the Firm recognises that remuneration is a key component in how the firm attracts, motivates and retains quality staff and sustains consistently high levels of performance, productivity, and results.

4. Remuneration Framework

4.1. Fixed and Variable Components

Remuneration at the Firm is made up of fixed and variable components:

  • The fixed component base salary, pension, benefits reflect a staff member’s professional experience and organisational responsibility and is set in line with market rates at a level intended to attract and retain skilled staff.
  • Variable remuneration is paid as a discretionary bonus, which may be subject to retention or deferral depending on role and regulatory requirements.

Ratios of fixed and variable remuneration will be set to ensure that:

  • Fixed and variable components of an individual’s total remuneration are appropriately balanced.
  • The fixed component is a sufficiently high proportion of total remuneration to allow the firm to operate a fully flexible policy on variable remuneration, including having the ability to award no variable remuneration in certain circumstances where either an individual’s and/or the firm’s performance does not support such award.

4.2. Base Salary

Base salary provides a core reward for undertaking the role. Periodic reviews take into account the staff member’s role, scope of responsibilities, skills and experience, salary benchmarks (where available) and, where relevant, any local legislative or regulatory requirements.

4.3. Benefits

Benefits are made up of core benefits which are provided to all staff members; and extra voluntary benefits that may be chosen by certain staff members which may require contribution through salary sacrifice or other arrangements.

Retirement benefits are managed in line with applicable legislative requirements.

4.4. Discretionary bonus

Staff members who have been employed during a performance year 1 April to 31 March may be eligible to be considered for an annual bonus in respect of that year.

The variable remuneration pool for eligible staff members is determined by reference to the firm’s profitability and other quantitative and qualitative financial and non-financial factors, including risk considerations and conduct.

The Firm must act in the best interests of its client funds. Accordingly, the performance of the underlying funds (including, where relevant, investment risk) is also taken into account as appropriate.

5. Governance and Oversight

The Firm’s Board and Governance committee oversee the firm’s remuneration policy. Ultimate responsibility for the firm’s remuneration framework lies with the CEO.

The firm will:

  • Review the design and operation of the remuneration framework to ensure it is appropriate.
  • Review and agree individual staff compensation proposals, comprising both fixed and variable remuneration, based on financial and non-financial criteria including conduct.
  • Ensure that remuneration is consistent with the firm’s business strategy, financial performance, risk profile and long-term objectives; and that conflicts of interest in the remuneration process are effectively managed and mitigated.

Development and review of the Remuneration Policy is carried out periodically with support from senior managers.

The firm does not use external consultants in the development of its remuneration policies and practices.

6. Quantitative Remuneration Disclosure

For the financial year ending 31 March 2024, the total remuneration awarded to all staff was £1,852,767 of which £1,581,468 comprised the fixed component of remuneration, and £271,299 comprised the variable component.

For these purposes, ‘staff’ is defined broadly, and includes employees of the firm and its directors, staff indirectly employed through a service agreement, seconded staff and contractors.