We, Odey Asset Management LLP receive investment research published by third-parties, including brokers, to assist with our decision-making in respect of our investment management of the Fund.
This research may relate to financial instruments or other assets that are held or may be held by the Fund or may relate to the issuers of financial instruments or is related to a specific industry or market such that it informs views on these and provides a substantiated opinion as to the present or future value or price of such instruments or assets. It could also contain analysis, original insights and reach conclusions that could inform an investment strategy or add value to our decisions in relation to the Fund.
Under current market-practice the costs of such research are part of the transaction costs charged by brokers when purchases and sales of investments are undertaken by us for the Fund. However, under changes introduced by the EU Markets in Financial instruments Directive II (“MiFID II”), with effect from 3 January 2018, a maximum budget for research spend must be disclosed up front for the forthcoming year on an Investment Manager firm level and specific Fund level. As with current market practice, payment for research is made from an account funded by the Fund, which is ring-fenced for use only to pay for investment research (a “Research Payment Account”).
We operate a centralised research function as we consider that the strategies we manage across all our client assets are sufficiently similar to benefit from the investment ideas and themes generated by that external research. In addition, we may purchase bespoke research e.g. stock / company specific research, which is not relevant to all clients. These make up our research budget.
The Fund will be charged a proportion of the cost of research that applies to all our clients. The charge applied to the Fund will be calculated on a pro-rata basis by reference to the value of the Fund’s assets in proportion to the total value of assets managed by us.
In addition the Fund may be charged a proportion of the cost of bespoke research that is applicable to it. The charge applied to the Fund will be calculated on a pro-rata basis by reference to the value of the Fund’s assets in proportion to the total value of the assets benefitting from the relevant bespoke research.
This research charge will be taken alongside transaction charges by the brokers the Fund deals with, so the timing will be similar to the way research costs are currently borne, ensuring that the amount is clearly identified as a research charge and paid into the Research Payment Account held by Odey Asset Management LLP.
We will regularly assess the quality of the research we purchase based on robust quality criteria, and its contribution to making better investment decisions. The budgeted amount for the research charge and any increases to the research budget for the Fund will be published on our website at www.odey.com. If there is a surplus in the Research Payment Account at the end of the period, we will either rebate this to the Fund or carry it forward to set against the budgeted amount for the following year.
The total amount of the research charge borne by the Fund for the relevant accounting period will be reported in the Fund’s annual report and accounts. Furthermore, as a shareholder you may ask us to provide you with a summary of the following information for the most recent annual accounting period in respect of the Fund:
Fund specific charges are disclosed on odey.com. Click into a fund on the Our Funds page - then click on codes and fees to see the charges.