Innocap Global Investment Management (Ireland) Limited
IGIM is a private company limited by shares registered under Part 2 of the Companies Act 2014 in
Ireland on 22 February 2016. IGIM has been approved by the Central Bank of Ireland as an
“Alternative Investment Fund Manager” pursuant to the Directive 2011/61/EU and a UCITS
management company under Regulation 17 of the European Communities (Undertaking for
Collective Investment in Transferable Securities) Regulation 2011 (S.I. No. 352 of 2011), as
amended. Voting shares of IGIM are held by Innocap Investment Management Inc. (“Innocap”),
which, as of the date of this Brochure, is owned by BNP Paribas (“BNPP”) (50%), CDP
Investissements Inc. (30%), a wholly-owned subsidiary of la Caisse de dépôt et placement du
Québec (“CDPQ”), and Innocap’s management, via 10313157 Canada Inc. (20%).
Investment Management Services
IGIM may provide investment management and advisory services to pooled investment vehicles,
pension funds, financial institutions, management companies and other accredited investors within
the meaning of the laws of the relevant jurisdictions, as amended from time to time. In connection
with providing these investment management and advisory services, IGIM may act as investment
manager with discretionary and non-discretionary trading authority depending on the type of
mandate.
More specifically, IGIM is responsible for: (i) the structuring and Management of investment
vehicles; (ii) monitoring risk management of investments made by all investment vehicles managed
by IGIM; and (iii) monitoring compliance of investment vehicles managed by IGIM with their
respective investment guidelines.
When acting on a discretionary basis, IGIM delegates the management of a client’s portfolio, in
accordance with the client’s investment guidelines and restrictions, to a sub-advisor (a “Trading
Advisor”) or portfolio management is delegated to the Trading Advisor directly by the Fund (as
such term is defined below). In addition, Innocap may provide various services to its clients including
risk management, asset control, reporting and due diligence and supervises the trading activities of
the Trading Advisor.
IGIM serves the Funds, as defined below, in various capacities, as detailed below:
- as investment manager and portfolio manager of an Irish open-ended umbrella investment
company established as undertakings for collective investment in transferable securities
pursuant to the European Communities (Undertakings for Collective Investment in Transferable
Securities) Regulations and management company and portfolio manager to an Irish open-
ended umbrella investment company established as undertakings for collective investment in
transferable securities pursuant to the European Communities (Undertakings for Collective
Investment in Transferable Securities) Regulations (together, the “UCITS Funds”);
- as alternative investment fund manager and portfolio manager to one Irish qualifying investor
alternative investment fund (along with the UCITS Funds, the “Irish Funds”); and
- as platform manager to several funds established as (1) Delaware limited partnerships which
are dedicated to a sole Canadian investor (the “Delaware Funds”), (2) a Massachusetts limited
liability company which is dedicated to a sole US investor (together with the Delaware Funds,
the “US Funds”) and (3) sole investor exempt companies incorporated in the Cayman Islands
(the “Cayman Funds”).
In addition, IGIM offers investment management services to a fund of a Luxembourg SICAV (the
“Luxemburg Fund”, and together with the Irish Funds, the US Funds and the Cayman Funds, the
“Funds”).
The management of the portfolio of the Funds is delegated to sub-advisors (the “Trading
Advisors”), which implement various types of investment strategies following their respective
investment approaches.
The Funds are divided between two types of funds:
(1) Funds in which the assets of several investors are pooled (“Commingled Funds”); and
(2) Funds dedicated to a sole investor (“Dedicated Funds”).
Commingled Funds provide investors with access to various investment strategies while dividing
the costs and expenses between several investors. Dedicated Funds offer investors a tailored and
dedicated approach to their investment needs but may impose additional requirements such as a
higher minimum subscription amount. Investors in the Dedicated Funds may be granted a broader
role than investors in Commingled Funds, including input on investment guidelines and restrictions.
Investment Restrictions
Investors in the Dedicated Funds may impose restrictions on investments in certain securities or
types of securities.
Investors in the Commingled Funds are generally not permitted to impose such restrictions.
Clients’ Assets
As of October 31st, 2019, IGIM managed USD 7,397,445,148 on a discretionary basis.
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Compensation
With respect to the Funds, IGIM is generally paid an investment management fee that is negotiated
and based on the net asset value (“NAV”) of each class of shares of the Funds. The management
fees are payable monthly or quarterly in arrears at the end of each relevant payment period and are
deducted from each class of shares of Funds. In addition, IGIM may receive fees generated through
share class FX hedging services. The Funds launched or terminated during the relevant monthly or
quarterly period will be charged a pro-rated fee. The fees payable by each Fund are set forth in
detail in each of the Funds' respective offering documents, when applicable, or in an agreement
with the relevant Fund or investor, as the case may be.
Additional Fees
Funds managed by IGIM may also bear the following fees:
Trading Advisor Fees
Fees paid to the Trading Advisors vary and generally include a management fee based on the NAV
of the relevant Fund and a performance fee based on the net trading gain of this Fund. Further
details can be obtained from IGIM and are disclosed in the relevant offering documentation (where
applicable).
Administration Fees
The Funds may also bear administrative fees and expenses based on the NAV of the Funds,
sometimes subject to a minimum fee, which may include administration fees, registrar and transfer
agent fees and expenses, accounting, audit and legal costs, custodial fees, bookkeeping and
recordkeeping costs, communication and promotional expenses, other professional fees and
expenses, any trading and investment-related costs and expenses and dissolution costs, regardless
of whether profits are realized.
Trading Fees
Certain types of strategies employed in the Funds, or in underlying investment vehicles in which the
Funds invest, may require frequent changes in trading positions and consequent portfolio turnover.
This may involve brokerage commission expenses exceeding those of other investment schemes
of comparable size. In relation to such Funds, they must therefore make meaningful profits from
their investments to avoid depletion or exhaustion of their assets from these and other expenses.
Other Fees
The Funds may be subject to other types of fees including initial set-up fees, liquidation or
redemption fees, administration services and related software fees, banking commissions and
charges, custodian fees, legal fees, audit fees and other professional advisory fees, company
secretarial fees, registration and statutory fees, regulatory fees, translation and accounting
expenses, interest on borrowings, insurance costs and/or premiums, director and officer fees and
expenses, licensing and government filing fees, taxes and governmental expenses applicable to
the Funds, costs of preparation, translation, printing and distribution of reports and notices,
marketing material and advertisements and periodic update of the offering documentation, stock
exchange filing fees, expenses in connection with registration, listing and distribution of the Funds
issued or to be issued, expenses in connection with obtaining and maintaining a credit rating for
any Fund, expenses of shareholders meetings, expenses of the publication and distribution of the
NAV, clerical costs of issue or redemption of shares, postage, telephone, facsimile and telex
expenses, costs of litigation, brokerage, research and market data expenses (except to the extent
that all or a portion of its costs in respect of brokerage or research-related services or products are
paid through the use of "soft dollars", where permitted) and any other expenses in each case
together with applicable value added taxes. For more details on brokerage practices, please refer
to Item 12.
Except as stated above and where applicable, the Funds will reimburse IGIM and/or the relevant
service providers, as applicable, for all costs and expenses incurred or paid by them associated
with the set-up costs for the Funds and the Funds’ ongoing operations. This will include all
customary expenses including, but not limited to, maintaining the Funds’ registered office in the
relevant jurisdiction, annual governmental registration and authorisation fees, legal and audit
expenses, administrative, custodian, rating agency fees, pricing services fees, costs and expenses
of third-party risk management products and services (including but not limited to the costs of risk
management software or database packages) consultant and other service provider expenses and
fees, background checks and other due diligence fees, printing, mailing, costs related to
communication with investors, tax consultation, compliance services, administrative costs in relation
to annual reports and financial information, and similar ongoing expenses. The fees and expenses
payable to service providers may change from time to time.
Fees and charges which are applicable to a particular Fund shall be charged to it and other charges
will be allocated to the Funds in a manner which IGIM believes is fair and equitable. Some charges
may be split equally among Funds or may be allocated pro rata to the net assets in each Fund.
Side Letters
Where permitted under applicable laws and regulations, IGIM may enter into letter agreements with
certain investors granting different business and investment terms which may not be available to
the other investors, provided that doing so does not adversely affect other investors.
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Type of clients
IGIM provides investment management services to clients that are investment funds. In respect of
the Funds, investors may include some or all types of qualifying investors as set forth in the relevant
offering documentation and, solely with respect to the UCITS Funds, retail investors.
Minimum account size
The minimum subscription amount in a Fund varies. With respect to a Dedicated Fund, the minimum
initial investment is generally higher than in Commingled Funds but may vary depending on the
investment objectives and particular circumstances of a specific account.
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Methods of Analysis
IGIM offers advice on the selection and appointment of Trading Advisors. IGIM performs due
diligence on, and monitors, the Trading Advisors’ activities relating to the Funds. IGIM generally
evaluates potential Trading Advisors by considering a variety of different factors including, without
limitation: education, experience, background and reputation of key personnel, investment
philosophies, risk management techniques employed, operational capabilities, risk/reward attributes
of each Trading Advisor’s strategy, portfolio composition, information obtained through personal
interviews and literature, as well as economic factors.
Investment Strategies
The Funds may deploy various strategies, including:
Multi-Strategy;
Credit;
Structured Credit;
Credit – Multi-Strategy;
Commodity – Relative Value;
Convertible Arbitrage;
Dedicated Short Bias;
Emerging Markets;
Equity Market Neutral;
Event Driven – Distressed;
Event Driven - Multi-Strategy;
Event Driven – Risk Arbitrage;
Fixed Income Arbitrage;
Fixed Income Long Only;
Volatility Arbitrage;
Global Macro;
Europe High Yield;
US High Yield;
Long Only;
Long/Short Equity;
Systematic;
Hedge Fund Index Replication; and
Managed Futures.
Risk of Loss
There can be no assurance that the investment strategies implemented in the Funds will be
successful and that their investment objective(s) will be achieved. The Funds could realize
substantial or total losses, rather than gains and investors should be prepared to bear this risk.
Profitable trading is often dependent on anticipating trends or trading patterns. In addition, markets
experiencing random price fluctuations, rather than defined trends or patterns, may generate a series
of losing trades. There have been periods in the past when the markets have been subject to limited
and ill-defined price movements, and such periods may reoccur. Any factor which may lessen major
price trends (such as, but not limited to, governmental controls affecting the markets) may reduce
the prospect for future trading profitability. Any factor which would make it difficult to execute trades,
such as reduced liquidity or extreme market developments responsible for maximum increase in
price allowed in a single day could also be detrimental to profits or cause losses. Increases in margin
levels on financial instruments may occur in the future. Such increased margin and other potential
regulatory changes may adversely impact the trading strategies. No assurance can be given that
the trading techniques and strategies of the Funds will be profitable in the future.
The following is a non-exhaustive list of the more common risks that investors should consider in
connection with an investment in the Funds:
Investments in, or linked to, hedge funds are highly speculative and may be highly volatile;
Transferability and withdrawals of shares in the Funds may be restricted or suspended;
Although the hedge fund strategies implemented by a Trading Advisor may provide the
opportunity for positive returns, investors in such strategies may also experience significant
volatility and incur the risk of permanent and complete capital loss;
Investors shall bear the financial risk and possible limited liquidity of underlying investments;
Multiple levels of fees and expenses may be payable by the Funds which can reduce a client’s
returns;
Underlying instruments may be hard to value;
There can be no assurance that the strategies implemented by the Trading Advisors will achieve
the investment objective
There can be no assurance that the due diligence conducted on a Trading Advisor will uncover
all relevant facts regarding the Trading Advisor or the proposed strategy;
Increased reliance upon internet-based programs and applications to conduct transactions and
store data creates growing security and operational risks. Targeted cyberattacks, as well as
accidental events, can lead to a breach in computer and data systems security and subsequent
unauthorized access to sensitive transactional or personal information. Data taken in breaches
may be used by criminals in committing identity theft, obtaining loans or payments under false
identities, and in other crimes that could affect the value of assets in which the Funds invest.
Cybersecurity breaches at the Firm or its vendors and service providers may also lead to theft,
data corruption, or overall disruption in operational systems. These threats may also directly or
indirectly affect the Funds through cyber incidents with third party service providers or
counterparties. Cybersecurity risks can disrupt the Firm’s ability to engage in investment-related
and transactional business, cause direct financial loss or reputational damage, or lead to
violations of applicable laws, including those related to data and privacy protection. These risks
also result in ongoing prevention and compliance costs.
Investors should carefully review the sections regarding the investment strategy and approach, risk
factors and conflicts of interests contained in the offering documentation, when applicable, of the
Fund in which they intend to invest. Investors should also consult their financial, legal and tax
advisors before making an investment decision.
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IGIM and its employees have not been involved in any legal or disciplinary events that would be
material to a client’s or a prospective client’s evaluation of IGIM’s investment management business
or the integrity of its management.
From at least 2004 through 2012, BNPP, one of Innocap’s shareholders, knowingly and willfully
moved over $8.8 billion through the U.S. financial system on behalf of Sudanese, Iranian, and Cuban
sanctioned entities, in violation of U.S. economic sanctions, including more than $4.3 billion in
transactions involving entities that were specifically designated by the U.S. Government as being
cut off from the U.S. financial system. BNPP engaged in this criminal conduct through various
sophisticated schemes designed to conceal from U.S. regulators the true nature of the illicit
transactions. On June 30, 2014, the U.S. Department of Justice (the “Department of Justice”) and
the Office of the U.S. Attorney for the Southern District of New York (the “SDNY”, and together with
the Department of Justice, the “DOJ”) filed a notice of intent to file a one-count criminal information
in the District Court for the Southern District of New York (the “District Court”), and the New York
County District Attorney’s Office (“DANY”) filed a two-count criminal information in the Supreme
Court of the State of New York, County of New York (the “Supreme Court”) against BNPP. The
DOJ’s information, which was filed on July 9, 2014, charged BNPP with conspiracy to commit
violations of the International Emergency Economic Powers Act and the Trading with the Enemy Act,
and regulations issued thereunder. DANY’s information charged BNPP with the crime of falsifying
business records in the first degree and conspiracy in the fifth degree. BNPP agreed to resolve the
action brought by DANY through a plea agreement dated June 30, 2014 and the action brought by
the DOJ through a plea agreement dated June 28, 2014 (the “Plea Agreements”). The Plea
Agreements required BNPP to plead guilty to the charges set out in the respective information and
to pay over $6.2 billion to the U.S. and New York state governments. The Plea Agreements also
required BNPP to lawfully undertake certain remedial actions to address the conduct described in
the Plea Agreements and the attachments thereto (the “Conduct”). On April 15, 2015, BNPP was
sentenced by the Supreme Court to a three-year conditional discharge, in line with the DANY Plea
Agreement, while requiring BNPP to implement compliance procedures and training, among other
things. On May 1, 2015, the District Court entered a final judgment of conviction against BNPP, while
requiring remedies that are materially the same as those set forth in the DOJ Plea Agreement,
including a term of probation of five years and an obligation of continued cooperation.
BNPP also entered into regulatory settlements relating to the Conduct. BNPP agreed to enter into a
Cease and Desist Order Issued Upon Consent with the Board of Governors of the Federal Reserve
System (the “Federal Reserve”) and the French Autorité de Contrôle Prudentiel et de Résolution
(the “ACPR”) to resolve certain findings by the Federal Reserve and ACPR relating to the Conduct.
BNPP also agreed to enter into an Order to Cease and Desist and Order of Assessment of a Civil
Money Penalty Issued Upon Consent with the Federal Reserve to resolve certain findings by the
Federal Reserve relating to the Conduct. BNPP and the New York State Department of Financial
Services (the “DFS”) entered into a Consent Order to resolve certain findings by the DFS relating to
the Conduct. Additionally, BNPP entered into a Settlement Agreement with the United States
Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) to resolve certain findings
by OFAC relating to the Conduct. The settlement with the Federal Reserve required BNPP to pay
$508 million to the Federal Reserve, while the settlement with the DFS required BNPP to pay
$2.2434 billion to the DFS.
Neither IGIM, Innocap nor any other affiliate of BNPP registered with the SEC as an investment
adviser under the Investment Advisers Act or a broker-dealer under the Securities Exchange Act of
1934 was named in any of these settlements or involved in the Conduct underlying these
settlements.
In addition, pursuant to a decision by the Finansinspektionen (Sweden) on April 29th, 2013, CDPQ
was ordered to pay a penalty fee of SEK 1 million (approximately USD 104,000) for failure to report,
within the time limit prescribed by law, an increase in its holding of shares in Semafo Inc. which
exceeded 5% of the total shares and 5% of the number of votes for all shares in Semafo Inc.
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IGIM is based in Ireland and is mainly engaged in the business of managing alternative investment
funds.
IGIM is also registered as a commodity pool operator with the U.S Commodity Futures Trading
Commission and is a member of the National Futures Association.
IGIM has retained Innocap, its parent company, to provide certain non-discretionary advisory and
support services to IGIM. The services provided by Innocap include risk management assistance,
advisory and related services in respect of funds managed by IGIM. Innocap may provide advice in
respect of potential investments and price movements relating to same. Innocap may provide
analysis in respect of the progress of investments made by the Funds and the provision of reports
relating to these investments. Innocap can also assist IGIM in its assessment of compliance with
investment restrictions and in its due diligence of potential trading advisors. In addition, Innocap can
assist with the reconciliation of reports received from other third party service providers and can
provide assistance with regard to the operational set up of any new funds. Other typical clerical
services which may also be required, such as assisting with financial statements and regulatory
reports, and inputting payments to be processed by IGIM in relation to its bank accounts (and not
the Funds’). Innocap’s role is facilitative only.
Please note that the above-mentioned list should not be construed as being exhaustive but rather
as being a summary of the services provided by Innocap to IGIM.
Please also note that IGIM has relationships and arrangements that are material to its
advisory/management/business and/or its clients with the following entities that are related persons
(the “Related Persons”):
BNPP: IGIM is wholly-owned by Innocap which is partially owned by BNPP. BNPP is a
French Société anonyme (S.A.) that holds 50% of the voting and equity securities of
Innocap.
Caisse de dépôt et placement du Québec (“CDPQ”): IGIM is wholly-owned by Innocap
which is partially owned by CDPQ. CDPQ is an institutional investor that manages several
public and parapublic pension plans and insurance programs in Quebec. CDPQ holds 30%
of the voting and equity securities of Innocap.
Cayman domiciled single investor exempted companies: IGIM acts as the platform
manager of the Cayman Funds. The beneficial owner of one of these structures is a related
person of Innocap and IGIM.
Delaware Funds: IGIM acts as the platform manager of the Delaware Funds. Certain
Delaware Funds structured as limited partnerships are dedicated to a sole investor which is
also a related person of Innocap and IGIM.
Furthermore, a person related to IGIM is an investor in another Delaware Fund.
Icare Investment Solutions PLC: IGIM acts as the management company to Icare
Investment Solutions PLC. A person related to IGIM is invested in Icare Investment
Solutions PLC.
Innocap Investment Management Inc.: IGIM is wholly-owned by Innocap. In addition,
Innocap acts as investment advisor of IGIM.
Conflicts of Interest
IGIM may face conflicts of interest in managing the Funds which could impact IGIM’s objectivity and
the performance of its obligations. IGIM has adopted a Conflicts of Interest Policy and a Code of
Ethics (see Item 11) which include policies and procedures designed to monitor, manage and
reduce potential conflicts of interest.
Affiliation with IGIM’s shareholders
IGIM’s direct affiliation with Innocap and indirect affiliation with BNPP, CDPQ and their subsidiaries
makes it important to put in place policies aimed at addressing any potential conflicts of interest and
ensuring that all investment decisions and their execution are made in the best interest of IGIM’s
clients, notably:
(a) IGIM will maintain operational and decision-making autonomy in the exercise of its activities.
(b) Decisions will be made in the best interest of the clients.
(c) IGIM does not advise on stock selection as this is delegated to Trading Advisors, but does
provide cash management services to certain Funds. When providing such services, IGIM
might advise clients with respect to the purchase and sale of securities issued by a related
person. However, IGIM will only do so if:
• it considers a purchase or sale to be in the best interests of its clients;
• the purchase or sale will not give rise to any duplication of management fees; and
• the client’s prior consent has been obtained according to applicable securities legislation.
Outside Business Activities and Directorships
Conflicts of interest can notably arise when a director, an officer or employee of IGIM engages in
outside business activities or serves on the board of directors of another entity, including, without
limitation, another investment company. Before approving any outside business activities, IGIM will
consider potential conflicts of interest and, if it believes that such potential conflicts of interest cannot
be managed, the outside activity or directorship will not be permitted. IGIM requires that its officers
and employees seek permission before participating in any external business activity or accepting
a directorship that could raise any conflict and has adopted strict policies with regards to
participation in external business activities and directorships. In the event that IGIM or a related
person (i) obtains material non-public information in such capacity with respect to any such
company or (ii) is subject to trading restrictions pursuant to the internal policies of IGIM; IGIM may
be prohibited from engaging in transactions with respect to the securities or instruments of such
company, which prohibition may have an adverse effect on clients of IGIM.
Directors’ and Officers’ Conflicts of Interest
Directors and officers of IGIM may have a direct or indirect financial interest in entities (including,
without limitation, Innocap, BNPP, CDPQ, the Trading Advisors, and their affiliates) that provide
services for compensation for IGIM. Thus, such directors may have a conflict of interest between
their duty to act for the benefit of IGIM and their financial interest in increasing compensation or
fees to be paid to such entities. However, IGIM’s directors and officers have the duty to exercise
their activities in good faith and with integrity.
Services not Exclusive
IGIM may perform investment management services for various clients. This may create a conflict
of interest as the time and effort of IGIM’s officers, key employees and principals will not be devoted
exclusively to any one client. IGIM may give advice and take action in the performance of its duties
with respect to one client or investment vehicle which may differ from advice given, or the timing or
nature of action taken, with respect to other clients or investment vehicles, so long as it is IGIM’s
policies, to the extent practicable, to allocate investment opportunities among all clients for which
such investment would be appropriate on a fair and equitable basis.
Compensation Practices
IGIM does not receive commission-based remuneration. In connection with the services rendered
to the Funds, IGIM has no revenues other than those specifically disclosed in the relevant
documentation.
Transactions with Affiliates
IGIM may cause the Funds to enter into transactions, including, without limitation, securities
transactions, derivative contracts, and other transactions of a similar nature, with its affiliates or
certain of its clients. There may be perceived conflicts of interest in the fact that BNPP, which may
be selected as counterpart to the Funds, is an important shareholder of Innocap. IGIM may enter
into such dealings provided that they are on an arm’s length basis and on terms no less favourable
to the Funds than could reasonably have been obtained had the dealing been effected with an
independent third party, provided that such activity complies with applicable legislation.
More specifically, IGIM may cause a fund it manages to invest excess cash in shares of registered
money market funds managed by BNPP, an affiliate of IGIM. This presents a conflict of interest for
the adviser, because BNPP will earn management fees from the money market fund that it would
not otherwise earn if the fund invested in shares of a third party money market fund. IGIM mitigates
this conflict through disclosure in this Form ADV.
Services Provided by Affiliates
IGIM has retained Innocap to provide certain middle office and back office functions as specified
above.
The information provided to Innocap under these agreements is shared under strict confidentiality
and on a need-to-know basis.
On behalf of a Fund, IGIM, following advice received from Innocap or a Trading Advisor, may use
an executing broker-dealer affiliated with IGIM, Innocap or a Trading Advisor. IGIM or the Trading
Advisor
will do so only if the transaction is consistent with their respective duty to seek best
execution and applicable legislation.
On behalf of a Fund, IGIM may retain a prime broker, exchange traded derivatives clearer or
custodian affiliated with IGIM, Innocap or the Trading Advisors for clearing, custody and such other
auxiliary services under limited circumstances. IGIM will do so only if terms and conditions of such
services are negotiated on an arm’s length basis and are no less favourable to the Fund than could
reasonably have been obtained if the services were provided by an independent third party. In
particular, IGIM may retain affiliates of BNPP as prime brokers, futures clearers and custodians.
Side Letters - Waivers
IGIM may have a conflict of interest in approving side letters providing certain investors with different
terms regarding their investment in the Funds, or a waiver of certain terms in a specific instance, in
accordance with applicable laws and regulations. IGIM has permitted, and may permit in the future,
certain investors to invest in the Funds on more favourable economic terms to those applicable to
other investors in such Funds. Side letters and waivers will be permitted by IGIM so long as they
are permitted by applicable laws or where such preferential treatment does not adversely affect
other investors.
Information Provided to Affiliated Entities
Where permitted by applicable laws and regulations, IGIM’s affiliates may be provided with
enhanced transparency in relation to assets comprised in the Funds as they may need more
transparency to assess global risk (unrelated to investment decision in a Fund). However, IGIM’s
affiliates will not be granted preferential treatment with respect to the liquidity to redeem or subscribe
from the Funds.
Recommendation or Selection of Trading Advisors
From time to time, IGIM may cause clients to invest in funds that are managed or advised by its
Related Persons or its affiliates or have other business relationships (such as fee sharing
agreements) with IGIM or its affiliates. This conflict of interest is mitigated by the fact that IGIM has
a fiduciary duty to place the interest of its clients first and does not receive different compensation
from the same source (i.e. double-dipping).
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and Personal Trading
Code of Ethics
Pursuant to Rule 204A-1 of the Advisers Act, IGIM has adopted a Code of Ethics (the “Code”) which
incorporates the following general principles in relation to investment advice, as part of its
investment management services, given for the Funds that all employees are expected to uphold:
employees must at all times place the interests of clients first; all personal securities transactions
must be conducted in a manner consistent with the Code and any abuse of an employee’s position
of trust and responsibility must be avoided; employees must not take any inappropriate advantage
of their position; information concerning the identity of securities and financial circumstances of the
clients must be kept confidential; and independence in the investment decision-making process
must be maintained at all times. The Code is also designed to address and mitigate potential
conflicts of interest.
Investors and clients may request a copy of the Code by contacting IGIM at the address or
telephone number listed on the first page of this document.
Personal Trading
The Code also places restrictions on personal trades by employees, including the disclosure of their
personal securities holdings and transactions to IGIM or its parent company on a periodic basis.
The Code also includes an insider trading policy that is designed to prevent the misuse of material,
non-public information. IGIM's personnel are required to certify their compliance with the Code,
including the insider trading policy, on a periodic basis.
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IGIM has discretionary authority with regards to the Funds, including authority to make decisions
with respect to which securities are bought and sold, the amount and price of those securities, the
brokers or dealers to be used for a particular transaction, and commissions or markups and
markdowns paid. Even in cases where IGIM has full discretionary authority, IGIM's authority is
limited by its own internal policies and procedures and each Fund's investment guidelines. Further,
IGIM generally delegates discretionary management of assets to Trading Advisors, except for cash
management purposes in certain situations.
With regards to the Funds, IGIM does not actively trade in individual equities or fixed income
securities. IGIM typically oversees the Funds’ strategies managed by the Trading Advisors; thus,
it does not have the same duty to seek best execution as an investment manager that invests
directly in equities and fixed income securities. The Trading Advisors typically request that accounts
be opened with the brokers through which their own investment funds trade. The proposed brokers
are evaluated by IGIM’s Risk Oversight Committee in accordance with the criteria set forth below.
To ensure that Trading Advisors seek to obtain best execution, IGIM ensures that each investment
management agreement with Trading Advisors contains obligations for the Trading Advisors to
comply with applicable guidance regarding best execution and soft dollars.
Criteria for evaluating Broker-Dealers
When evaluating a proposed broker-dealer, IGIM, with advice from Innocap, will generally look for
the following criteria:
understanding of the business and the investment objective, strategy and approach of the
fund(s) for which the broker-dealer will act;
capacity to provide services for the daily activities of a fund, day after day and without material
failures even when transactions become more complex;
strong financial situation and good capitalization, in particular, broker-dealers (the corporate
group which they belong to, or their guarantor, if applicable) will be assessed based on criteria
such as:
o FDIC tier 1 common capital ratio;
o Basel III minimum capital requirement;
o Credit ratings;
o Credit default swap spread; and
o Stock performance.
1 IGIM does not offer brokerage services.
strong global securities lending presence;
strong technological capabilities; and
cash management capabilities in order for the fund to obtain better returns for any cash
holdings.
IGIM, while evaluating broker-dealers, will also consider the broker-dealer’s back office capabilities.
Soft Dollars
It is IGIM’s policy not to enter in any formal soft dollar arrangements.
Trading Advisors may enter into soft dollar arrangements, subject to IGIM’s or a Fund’s prior
approval and in compliance with applicable laws.
Brokerage for Client Referrals
IGIM may enter into agreements on behalf of the Funds managed by it with certain brokers-dealers
that act as prime brokers on behalf of such Funds. From time to time, IGIM's personnel may speak
at conferences and other events for potential qualified investors interested in investing in Funds
which are sponsored by those prime brokers. These conferences and events may be a means by
which IGIM can be introduced, subject to the applicable laws and regulations, to potential qualified
investors interested by the Funds. Currently, neither IGIM nor the existing Funds compensate prime
brokers for organizing such “capital introduction” events or for any investments ultimately made by
prospective qualified investors attending such events (although either may do so in the future in
accordance with applicable laws and regulations). While such events and other services provided
by a prime broker may influence IGIM in deciding whether to use such prime broker in connection
with brokerage, financing and other activities of the Funds, IGIM will not commit to allocate a
particular amount of brokerage to a broker-dealer in any such situation and does not request or
instruct Trading Advisors to do so.
From time to time, the Funds may accept investments from full-service financial firms who are
investing on their own behalf or on behalf of third-parties. The financial services firms may have
related entities that include broker-dealers and IGIM may from time-to-time utilize these
broker-dealers when IGIM believes that a particular broker-dealer provides best execution for client
transactions. IGIM does not take these investments into consideration when determining which
broker-dealers to use to execute client transactions, and IGIM maintains various internal controls for
this purpose.
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The Funds are monitored on an ongoing basis by IGIM’s and Innocap’s Investment & Risk
Management team, which reports its findings to IGIM. These reviews are subject to IGIM’s and
Innocap’s Chief Compliance Officers’ oversight. On a daily, weekly and monthly basis, where
applicable, IGIM and Innocap’s Investment & Risk Management team reviews a number of reports
that are designed to identify Funds that are outside the expected ranges for returns, volatility,
exposure to asset classes and exposure to industry sectors.
Reviews of a Dedicated Fund will also be triggered if an investor changes its investment objectives,
or if market, political, or economic environments change materially.
Investors receive account statements directly from their chosen custodian, prime brokers or the
Fund’s administrator on at least a quarterly basis, and as may be required by applicable legislation.
IGIM and/or Innocap may supplement these statements with other reports at the request of the
investor. In addition, investors of the Funds receive audited annual financial statements, except
where exemptions are available and agreed upon with such investor.
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IGIM does not receive any other economic benefits from non-clients in connection with the provision
of investment management services to clients. IGIM is very careful with any particular benefits,
compensation or remuneration practices that are inconsistent with its obligations to clients. It is
IGIM’s policy to never accept a commission-based remuneration. As of the date hereof, IGIM does
not compensate any parties for client referrals.
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Proxy Voting Policies and Procedures
Rule 206(4)-6 under the Advisers Act requires registered investment advisers that exercise voting
authority over client securities to implement proxy voting policies. Since IGIM does not trade
securities on behalf of the Funds, it does not vote proxies. Proxy voting is generally the responsibility
of the Trading Advisors. IGIM aims to ensure that the Trading Advisor has appropriate policies in
place in order to vote proxies in the best interests of the Funds.
A copy of the Policy is available to clients upon request. Since IGIM does not vote proxies there is
no information about how IGIM has voted.
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IGIM has never filed for bankruptcy and is not aware of any financial condition that is expected to
affect its ability to manage client accounts.
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Open Brochure from SEC website