Trinity Street Asset Management is a trading name of Bruce Nelson Capital LLP which is authorised and regulated by the Financial Services Authority (FSA). This document is our Pillar 3 Disclosure document which is required by Chapter 11 of the Prudential Sourcebook for Banks, Building Societies and Investment Firms (“BIPRU”). In BIPRU, the FSA has implemented rules to comply with the European Union’s Capital Requirements Directive. This Directive focuses on three pillars:

• Pillar 1 specifies the minimum capital levels that the business is required to carry to cover the risks to its business

• Pillar 2 sets out the supervisory review process to be used by both the business and the FSA to determine whether additional capital should be maintained against any risks not adequately covered under Pillar 1

• Pillar 3 specifies the disclosure requirements that a business publishes regarding its capital, risk exposures and risk assessment processes

Disclosures have been made in this document in compliance with BIPRU unless that information has been regarded as immaterial or proprietary/confidential.

Business Structure

The disclosures contained in this document relate to the business of Trinity Street Asset Management (“Trinity Street AM”), an investment manager authorised and regulated by the FSA.  For the purposes of reporting to the FSA, Trinity Street AM reports on a solo basis.

Capital Resources

The capital resources of Trinity Street AM consist of only Tier 1 capital with no deductions. 

Trinity Street AM’s capital requirements are based on the FSA’s rules for the base capital requirement, the credit risk requirement, the market risk requirement and the fixed overhead requirement.  Our Pillar 1 requirement is the higher of our fixed overhead requirement and the total of our credit risk and market risk requirements.  This will always be our fixed overhead requirement since the credit risk and market risk requirements are immaterial in comparison.

Trinity Street AM has assessed the adequacy of its internal capital to support current and future activities and this assessment is contained in the Internal Capital Adequacy Assessment Process, commonly known as ICAAP. This process includes an assessment of the specific risks to the business and the internal controls in place to mitigate those risks. These are tested under different scenarios in order to provide a robust picture of exposures for the business. Finally, an assessment is made of the probability of occurrence and the potential impact, in order to arrive at a level of required capital.

Risk Management

As a fund manager managing assets on behalf of its clients, Trinity Street AM is mainly exposed to operational risk. However, there is additional exposure both to business and credit risk.

Operational risk is Trinity Street AM’s biggest risk and the main focus of management attention. It covers the whole range of exposures, from risk of clerical errors, to risk of breach of the funds’ investment objectives. Consistent with our senior management arrangements, systems and controls, Trinity Street AM has policies and procedures to ensure that more than one person is involved in any activity in order to reduce these risks to acceptable levels.

Business risk relates to the risk of loss of reputation following adverse publicity and/or where proprietary/confidential information enters the public domain. Trinity Street AM has policies and procedures designed to mitigate such risk.

Credit risk is the exposure of the firm in terms of non-payment of management and performance fees. Trinity Street AM has policies and procedures designed to mitigate such risk.

All of these exposures are regarded as typical for a business engaged in the activity of investment management. The Chief Compliance Officer of Trinity Street AM, who is independent of the investment function, is responsible for reviewing and managing the risk exposures of the business.

Remuneration

Given the nature and small size of our business remuneration for all employees is set by the members of the Partnership. The Partnership formally reviews the performance of all employees and based thereon determines each employees overall level of remuneration and the split of that between base salary, bonus etc.

Given that the Firm has only one business area, fund management, all remuneration disclosed in our audited financial statements is from this business area.

The Firm has defined “Code Staff” to be the current members of the Partnership. The aggregate level of remuneration earned by the Partners is disclosed in our audited financial statements.

The Firm has determined that they are a “Tier 4” firm and has applied proportionality and, where relevant, has disapplied various provisions of the FSA Remuneration Code.