Nevastar Finance (Luxembourg) S.A. (hereinafter referred to as the “Company”) is an investment fund manager incorporated under the laws of the Grand-Duchy of Luxembourg and authorised by the Commission de Surveillance du Secteur Financier (hereinafter referred to as the “CSSF”) to act as:
As an investment fund manager, and in accordance with the provisions of the Law of 1 August 2019, amending the Law of 24 May 2011 on the exercise of certain rights of shareholders at general meetings of listed companies, the Company is required to establish an engagement policy outlining how shareholder engagement is embedded in the investment strategies of the investment funds under its management (hereinafter referred to as the “Funds”).
With reference to the foregoing, it is to be noted that the Company typically acts as the portfolio manager of the Funds.
However, at the time of issue of this Policy, portfolio management activities in respect of the two sub-funds of one of the Funds, Stronghold Real Estate S.C.A., SICAV-SIF, namely Fund No. 2 and Altona Fund III, are delegated to a third party, Stronghold Capital Pte. Ltd. In such circumstances, the Company will ensure that the delegated portfolio manager also integrate shareholder engagement in its investment strategy, if and when applicable.
The purpose of this Engagement Policy (hereinafter referred to as the “Policy”) is to describe how the Company integrates shareholder engagement in its Funds’ respective investment strategies. Specifically, this Policy describes how the Company, acting on behalf of the Funds, intends to:
This Policy applies exclusively to the Funds’ shareholdings in Target companies (i) which have their registered offices in European Union Member States and (ii) the shares of which are admitted to trading on a regulated market situated or operating within European Union Member States.
In recognition of the limited ability of the Company to exercise significant influence on Target Companies in those circumstances where the Fund’s shareholdings are not material, it is the policy of the Company NOT to integrate shareholder engagement in its Funds’ investment strategies if the aggregate shareholding of the said Funds into Target Companies amounts to less than 5% of the latter’s outstanding shares (as calculated on the basis of the full market capitalisation methodology, as opposed to the free-float methodology).
Accordingly, this materiality principle applies to each and every feature of this Policy as discussed in Sections 4. to 7. hereunder.
The Company is what is commonly known as an active asset manager; accordingly, it strongly believes in the monitoring of Target Companies.
Specifically, the Company only decides to invest in the shares of a Target Company once it has gained an in-depth understanding of the said Company’s overall business strategy, risk exposure and share capital structure.
In addition, the Company is committed to incorporating environmental, social and governance (hereinafter referred to as "ESG") criteria into its investment strategy. Full details of how the Company actually integrates ESG criteria in its Funds’ respective investment strategies may be found in the Company’s Sustainability Policy, as posted on its Website (https://www.nevastar.lu/sustainabilitypolicy).
As an active manager, the Company seeks to engage directly with the management teams of Target Companies.
Specifically, engagement includes an on-going communication between the Company’s Conducting Officers in charge of Portfolio Management and the management teams of Target Companies; such communication may range from obtaining regular updates regarding the financial situation of Target Companies to discussing specific issues, such as for instance a change of the overall business strategy.
In some cases, the Conducting Officers in charge of Portfolio Management may take a more focused approach, depending on the circumstances of Target Companies; such approach may extend to meetings with the management teams of Target Companies.
As an active manager, the Company recognizes that the exercise of voting rights is an important aspect of shareholder engagement, in particular if the Funds’ shareholding are material with regard to the outstanding shares of Target Companies.
The Company’s Conducting Officers in charge of Portfolio Management are ultimately responsible for determining whether and how to exercise voting rights.
More information in this respect may be found in the Company’s Voting Rights Policy, as posted on its Website (https://www.nevastar.lu/votingrightspolicy).
In some cases, the Company may cooperate with other investment fund managers, also shareholders of Target Companies, if it considers it to be in the best interests of the investors in its Funds. Such cooperation may be in the form of joining other investment fund managers in meetings with the management teams of Target Companies.
The Company is aware that potential conflicts of interests may arise when engaging with Target Companies.
Accordingly, it has designed and implemented measures in order to limit such potential conflicts of interests; such measures are governed by the provisions contained in the Conflicts of Interests Policy implemented by the Company.
More information in this respect may also be found in the Company’s Voting Rights Policy, as posted on its Website (https://www.nevastar.lu/votingrightspolicy).
The Company will make arrangements for this Policy to be posted on its Website(https://www.nevastar.lu/votingrightspolicy), so as to facilitate its access to Funds’ investors.
In addition, the Company will, on an annual basis, issue a report detailing how this Policy has been implemented, including a general description of how it exercised voting rights attached to shares of Target Companies.
This Policy will be approved by both the Management Committee and the Board of Directors of the Company.
This Policy will be reviewed at least once per year and updated/modified anytime necessary by the Policy Owners. Any material change will be approved by the Management Committee and the Board of Directors of the Company.