UK Investment Firms Prudential Regime

MIFIDPRU 8.6 Public Disclosure for the year ending 31 March 2023

1. Introduction

1.1 CapVest Partners LLP (the “Firm”) is authorised and regulated by the Financial Conduct Authority (“FCA”) in the United Kingdom. Under the FCA’s regulatory framework, the Firm is a “MIFIDPRU investment firm” and categorised as an SNI firm for the purposes of applying the regulatory requirements in the FCA Handbook for MIFIDPRU Investment Firms (“MIFIDPRU”).

1.2 The Firm’s approach to remuneration is compliant with the regulatory requirements set out in Chapter SYSC 19G of the FCA Handbook (the “MIFIDPRU Remuneration Code”).

1.3 Under the FCA’s regulatory requirements (specifically Chapter 8.6 of MIFIDPRU), the Firm is required to make specific disclosures relating to its remuneration policy and practices.

1.4 The disclosures in this document relate to the Firm’s most recent financial and performance year which ended on 31 March 2023.

1.5 This is the Firm’s first disclosure under MIFIDPRU 8.6.

2. Remuneration policy and practices

Qualitative disclosures

2.1 The Firm’s approach to remuneration for staff

Underlying principles:

  • The Firm’s remuneration policies and practices aim to reward staff fairly and competitively, while encouraging a culture of ethical and risk-focused behaviour. They have been designed so as to contribute to the achievement of the Firm’s objectives, but in a way that does not encourage risk-taking beyond the risk tolerances of the Firm or the violation of applicable laws, guidelines, and regulations.

  • The Firm’s remuneration decision making takes into account the capital position and economic performance of the Firm over the long term.

  • The Firm’s remuneration policies and practices are proportionate to the nature, scale and complexity of the Firm’s activities and risk tolerance.

  • The Firm’s governing body (“Management Body”) is responsible for ensuring that the Firm has in place a robust remuneration policy that aligns the Firm’s remuneration practices with its risk tolerance. The Management Body is also responsible for risk management, and, in conjunction with senior management, sets the risk profile of the Firm and its supporting risk management policies and procedures.

Linkage between variable remuneration and performance:

  • To support the Firm’s long term business strategy, the remuneration strategy has adopted a top-down multi-year approach. This ensures that variable remuneration is only paid from risk-adjusted revenues based upon the performance of the Firm, as well as on business line and individual performance, and only after the Firm’s liquidity needs, other potential liabilities and capital requirements have been considered on a rolling 3-year period.

Main performance objectives:

  • Assessment of the Firm’s financial performance takes account of underlying business cycles and benchmarks performance against an industry average. Firm and business unit performance also considers cash and guaranteed revenues, required capital and whether strategic goals have been achieved. For performance of individual staff members, the Firm uses an approach that considers non-financial criteria, including compliance with risk management and conduct policies, as well as financial criteria linked to revenue targets.

  • The variable component of remuneration for the Firm’s employees is dependent on the performance of the Firm, the relevant business units, and the individual. The performance measures are noted below.

  • Performance criteria used in relation to the Firm and business units: Risk-adjusted profits of the Firm are taken into account, as well as other considerations including current and future risks and achievement of strategic goals.

  • Performance criteria used in relation to the individuals: Variable remuneration is awarded based on employees’ individual performance against financial and non-financial metrics. As part of the performance evaluation process, employees are evaluated at least on an annual basis. This process measures each employee’s performance against relevant competencies as well as considering factors such as professional conduct.

  • Categories of staff eligible to receive variable remuneration: The following categories of staff are eligible to receive variable remuneration:

    • Employees;

    • Partners;

      • As indicated above, the Firm’s objective in using financial incentives with its staff is to contribute to its strategic objectives, but in a sufficiently prudent manner that does not encourage excessive risk-taking or the violation of applicable laws, guidelines, and regulations, and which takes into account the capital position and long-term economic performance of the Firm.

2.2 Below is a summary of the decision-making procedures and governance surrounding the development of the Firm’s remuneration policies and practices:

  • The Management Body has adopted remuneration policies and practices in line with the rules and guidance laid down by the FCA and the MIFIDRU Remuneration Code,and is responsible for the implementation of such policies and practices.

  • The Management Body reviews the Firm’s policies at least annually in accordance with the guidance and rules in SYSC 19G.3.

  • The Management Body ensures that the Firm, at least annually, conducts a central and independent internal review of whether the implementation of its remuneration policies and practices complies with the remuneration policy and practices adopted by the Management Body.

  • Consistent with MIFIDPRU 7.1.4 R, the Firm is not required, and so has not established, a remuneration committee.

  • The Firm has engaged with external advisers in the development of its remuneration policies and practices.

2.3 Key components of fixed remuneration are the base salaries paid to employees, fixed pension contributions, fixed drawings paid to the Firm’s partners and financial benefits paid to staff that meet the criteria for fixed payments (permanent, pre-determined, non-discretionary, non-revocable and not dependent on performance). Key components of variable remuneration include discretionary bonuses/profit shares and payments arising from holdings under carried interest plans.

Quantitative disclosures

Remuneration awarded to all Staff:

Fixed - £9,611,424

Variable - £49,072,000

Total - £58,683,424