Stewardship Code – Policy Statement

Oxford University Endowment Management Limited (“OUEM”) manages two portfolios, the Oxford Endowment Fund and the Oxford Capital Fund, which may invest in a range of assets including equities.  Both funds are unitised vehicles in which external investors associated with the University may invest.

The majority of the equity portfolios are invested in funds run by external managers.  In these cases, the responsibility for engaging with the companies in which OUEM has indirectly invested lies with the external manager concerned.  This Policy Statement does not therefore address the manner in which these external managers engage with the companies in which they have invested on behalf OUEM and other clients or investors.

OUEM may also invest directly in quoted and unquoted equities.  The application of the Principles contained in the Stewardship Code published by the Financial Reporting Council in July 2010 applying to such investments is set out below.

Principle 1:  Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities.

For quoted investments, OUEM engages with investee boards when it is deemed to be in the interests of the investors in its funds to do so.  Any engagement would normally be approved by the Chief Investment Officer or, if deemed necessary, the Investment Committee.

OUEM’s policy on voting at investee shareholder meetings is as follows:

• In the case of quoted companies, OUEM will vote where there is one or more items of business which it believes it is in the interest of the investors in its funds to do so;
• for unquoted companies, OUEM generally votes on all issues; and
• OUEM does not use the services of any external proxy voting agencies.

Principle 2: Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed.

OUEM maintains an effective policy for managing all conflicts of interest that may arise in the course of managing the investment portfolios for which it is responsible.  This policy ensures that decisions taken are always in the best interests of the firm’s clients and fully in compliance with the Financial Services Authority’s principles and rules.  A copy of OUEM’s Conflict of Interests Policy is available on request from the firm’s Compliance Officer.

Principle 3: Institutional investors should monitor their investee companies

Quoted and unquoted investees companies are monitored by the firm’s investment analysts and portfolio managers.  Any concerns coming to their attention will, in the first instance, be reported to the Chief Investment Officer and if deemed of sufficient concern may also be referred to the Investment Committee.  Any action deemed necessary will be taken in full accordance with the Code.

Principle 4: Institutional investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value.

OUEM considers each voting issue on an individual basis in the light of the circumstances of the individual company.  The nature and scope of any escalation or active intervention will take place only after the approval of OUEM’s Investment Committee to ensure that any such escalation or action is in the best interests of the investors in the funds that OUEM manages.

Principle 5: Institutional investors should be willing to act collectively with other investors where appropriate

In the case of both quoted and unquoted investments, OUEM will communicate with other investors when it deems it appropriate but will agree to collaborate with other investors only after the approval of the Investment Committee.

Principle 6: Institutional investors should have a clear policy on voting and disclosure of voting activity

In the case of quoted and unquoted companies OUEM will generally vote where this is considered to be in the investors in its funds interest to do so.  This may include voting against management, or registering an abstention, where it feels it is in its clients’ interests to do so on an issue.  The firm will seek to ensure that companies understand the rationale for any voting against a management proposal.  The firm’s voting record will be available to investors in its funds on request.

Principle 7: Institutional investors should report periodically on their stewardship and voting activities

OUEM will disclose, upon request, to an investor in one of its funds the manner in which the firm exercised any voting rights on behalf of the specific fund.  OUEM will not disclose its voting intentions or make public statements of the way it has voted to third parties without the express consent of the Investment Committee.

November 2010