Transparency and decision making
A - Best practice
- The manager should maintain an open dialogue with investors:
a. All investors shouldrecieve the same published information.
b. A summary of performance and fund activity should be supplied to all investors at quarterly (or other agreed frequency). This should include details of performance relative to fund benchmarks, objectives, targets and fund operating constraints (as applicable).
c. Annually (or as otherwise agreed) the manager should update investors on the strategy or business plan to achieve fund objectives, highlighting any risks to achievement and the managers proposals to mitigate or manage them.
d. Material matters that arise outside of the reporting cycle should be communicated to investors as appropriate on a timely basis. This may cover significant regulatory, governance or constitutional matters but not matters that would ordinarily be captured within the reporting on normal fund activities.
e. Investor feedback on information requirements should be taken into account in determining information provision for all investors where reasonable to do so.
f. Investors should be able to see the procedures for management of conflicts of interest. This should be provided in a timely manner and be relevant to the actual conflict of interest policy of the fund.
- When funds have entered into side letters the existence of these should be disclosed to all other investors.
B - Best practice
- Assurance audits on the manager’s internal controls should be undertaken annually and the results supplied to investors. To the extent that no such controls assurance review takes place, the manager should supply details to investors setting out how a robust control framework is monitored and maintained.